Correlation Between Seche Environnement and RBG Holdings
Can any of the company-specific risk be diversified away by investing in both Seche Environnement and RBG Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Seche Environnement and RBG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seche Environnement SA and RBG Holdings PLC, you can compare the effects of market volatilities on Seche Environnement and RBG Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Seche Environnement with a short position of RBG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnement and RBG Holdings.
Diversification Opportunities for Seche Environnement and RBG Holdings
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seche and RBG is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and RBG Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBG Holdings PLC and Seche Environnement is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Seche Environnement SA are associated (or correlated) with RBG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBG Holdings PLC has no effect on the direction of Seche Environnement i.e., Seche Environnement and RBG Holdings go up and down completely randomly.
Pair Corralation between Seche Environnement and RBG Holdings
Assuming the 90 days trading horizon Seche Environnement SA is expected to under-perform the RBG Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Seche Environnement SA is 4.98 times less risky than RBG Holdings. The stock trades about -0.38 of its potential returns per unit of risk. The RBG Holdings PLC is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 188.00 in RBG Holdings PLC on September 5, 2024 and sell it today you would earn a total of 122.00 from holding RBG Holdings PLC or generate 64.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Seche Environnement SA vs. RBG Holdings PLC
Performance |
| Timeline |
| Seche Environnement |
| RBG Holdings PLC |
Seche Environnement and RBG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seche Environnement and RBG Holdings
The main advantage of trading using opposite Seche Environnement and RBG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnement position performs unexpectedly, RBG Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in RBG Holdings will offset losses from the drop in RBG Holdings' long position.| Seche Environnement vs. Samsung Electronics Co | Seche Environnement vs. Samsung Electronics Co | Seche Environnement vs. Hyundai Motor | Seche Environnement vs. Toyota Motor Corp |
| RBG Holdings vs. Samsung Electronics Co | RBG Holdings vs. Samsung Electronics Co | RBG Holdings vs. Toyota Motor Corp | RBG Holdings vs. Hon Hai Precision |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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