Correlation Between SOGECLAIR and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both SOGECLAIR and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC, you can compare the effects of market volatilities on SOGECLAIR and STORE ELECTRONIC 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 STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOGECLAIR and STORE ELECTRONIC.
Diversification Opportunities for SOGECLAIR and STORE ELECTRONIC
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SOGECLAIR and STORE is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SOGECLAIR SA INH and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC 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 STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of SOGECLAIR i.e., SOGECLAIR and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between SOGECLAIR and STORE ELECTRONIC
Assuming the 90 days horizon SOGECLAIR is expected to generate 20.34 times less return on investment than STORE ELECTRONIC. But when comparing it to its historical volatility, SOGECLAIR SA INH is 2.12 times less risky than STORE ELECTRONIC. It trades about 0.0 of its potential returns per unit of risk. STORE ELECTRONIC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 12,013 in STORE ELECTRONIC on October 27, 2024 and sell it today you would earn a total of 4,737 from holding STORE ELECTRONIC or generate 39.43% 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. STORE ELECTRONIC
Performance |
| Timeline |
| SOGECLAIR SA INH |
| STORE ELECTRONIC |
SOGECLAIR and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOGECLAIR and STORE ELECTRONIC
The main advantage of trading using opposite SOGECLAIR and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOGECLAIR position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| SOGECLAIR vs. Discover Financial Services | SOGECLAIR vs. Direct Line Insurance | SOGECLAIR vs. REINET INVESTMENTS SCA | SOGECLAIR vs. Erste Group Bank |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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