Correlation Between SOGECLAIR and Plastic Omnium
Can any of the company-specific risk be diversified away by investing in both SOGECLAIR and Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium, you can compare the effects of market volatilities on SOGECLAIR and Plastic Omnium 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 Plastic Omnium. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOGECLAIR and Plastic Omnium.
Diversification Opportunities for SOGECLAIR and Plastic Omnium
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SOGECLAIR and Plastic is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SOGECLAIR SA INH and Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastic Omnium 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 Plastic Omnium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Omnium has no effect on the direction of SOGECLAIR i.e., SOGECLAIR and Plastic Omnium go up and down completely randomly.
Pair Corralation between SOGECLAIR and Plastic Omnium
Assuming the 90 days horizon SOGECLAIR is expected to generate 3.94 times less return on investment than Plastic Omnium. In addition to that, SOGECLAIR is 1.39 times more volatile than Plastic Omnium. It trades about 0.05 of its total potential returns per unit of risk. Plastic Omnium is currently generating about 0.25 per unit of volatility. If you would invest 863.00 in Plastic Omnium on October 30, 2024 and sell it today you would earn a total of 222.00 from holding Plastic Omnium or generate 25.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOGECLAIR SA INH vs. Plastic Omnium
Performance |
| Timeline |
| SOGECLAIR SA INH |
| Plastic Omnium |
SOGECLAIR and Plastic Omnium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOGECLAIR and Plastic Omnium
The main advantage of trading using opposite SOGECLAIR and Plastic Omnium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOGECLAIR position performs unexpectedly, Plastic Omnium 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 Plastic Omnium will offset losses from the drop in Plastic Omnium's long position.| SOGECLAIR vs. Lamar Advertising | SOGECLAIR vs. Linedata Services SA | SOGECLAIR vs. Automatic Data Processing | SOGECLAIR vs. YATRA ONLINE DL 0001 |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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