Correlation Between SOGECLAIR and MYFAIR GOLD
Can any of the company-specific risk be diversified away by investing in both SOGECLAIR and MYFAIR GOLD 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 SOGECLAIR and MYFAIR GOLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOGECLAIR SA INH and MYFAIR GOLD P, you can compare the effects of market volatilities on SOGECLAIR and MYFAIR GOLD 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 SOGECLAIR with a short position of MYFAIR GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOGECLAIR and MYFAIR GOLD.
Diversification Opportunities for SOGECLAIR and MYFAIR GOLD
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOGECLAIR and MYFAIR is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SOGECLAIR SA INH and MYFAIR GOLD P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYFAIR GOLD P and SOGECLAIR 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 SOGECLAIR SA INH are associated (or correlated) with MYFAIR GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYFAIR GOLD P has no effect on the direction of SOGECLAIR i.e., SOGECLAIR and MYFAIR GOLD go up and down completely randomly.
Pair Corralation between SOGECLAIR and MYFAIR GOLD
Assuming the 90 days horizon SOGECLAIR SA INH is expected to generate 2.3 times more return on investment than MYFAIR GOLD. However, SOGECLAIR is 2.3 times more volatile than MYFAIR GOLD P. It trades about 0.05 of its potential returns per unit of risk. MYFAIR GOLD P is currently generating about 0.05 per unit of risk. If you would invest 1,710 in SOGECLAIR SA INH on November 3, 2024 and sell it today you would earn a total of 60.00 from holding SOGECLAIR SA INH or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOGECLAIR SA INH vs. MYFAIR GOLD P
Performance |
| Timeline |
| SOGECLAIR SA INH |
| MYFAIR GOLD P |
SOGECLAIR and MYFAIR GOLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOGECLAIR and MYFAIR GOLD
The main advantage of trading using opposite SOGECLAIR and MYFAIR GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOGECLAIR position performs unexpectedly, MYFAIR GOLD 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 MYFAIR GOLD will offset losses from the drop in MYFAIR GOLD's long position.| SOGECLAIR vs. Clean Energy Fuels | SOGECLAIR vs. UNITED UTILITIES GR | SOGECLAIR vs. Compugroup Medical SE | SOGECLAIR vs. Clearside Biomedical |
| MYFAIR GOLD vs. VITEC SOFTWARE GROUP | MYFAIR GOLD vs. Magic Software Enterprises | MYFAIR GOLD vs. OPERA SOFTWARE | MYFAIR GOLD vs. G III Apparel Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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