Correlation Between SOGECLAIR and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both SOGECLAIR and BRIT AMER 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 BRIT AMER 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 BRIT AMER TOBACCO, you can compare the effects of market volatilities on SOGECLAIR and BRIT AMER 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 BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOGECLAIR and BRIT AMER.
Diversification Opportunities for SOGECLAIR and BRIT AMER
Modest diversification
The 3 months correlation between SOGECLAIR and BRIT is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SOGECLAIR SA INH and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO 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 BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of SOGECLAIR i.e., SOGECLAIR and BRIT AMER go up and down completely randomly.
Pair Corralation between SOGECLAIR and BRIT AMER
Assuming the 90 days horizon SOGECLAIR SA INH is expected to generate 1.78 times more return on investment than BRIT AMER. However, SOGECLAIR is 1.78 times more volatile than BRIT AMER TOBACCO. It trades about 0.02 of its potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.02 per unit of risk. If you would invest 1,625 in SOGECLAIR SA INH on September 20, 2024 and sell it today you would earn a total of 155.00 from holding SOGECLAIR SA INH or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOGECLAIR SA INH vs. BRIT AMER TOBACCO
Performance |
| Timeline |
| SOGECLAIR SA INH |
| BRIT AMER TOBACCO |
SOGECLAIR and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOGECLAIR and BRIT AMER
The main advantage of trading using opposite SOGECLAIR and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOGECLAIR position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER's long position.| SOGECLAIR vs. Airbus SE | SOGECLAIR vs. Superior Plus Corp | SOGECLAIR vs. Origin Agritech | SOGECLAIR vs. INTUITIVE SURGICAL |
| BRIT AMER vs. The Hanover Insurance | BRIT AMER vs. ZURICH INSURANCE GROUP | BRIT AMER vs. Tower One Wireless | BRIT AMER vs. United Insurance Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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