Correlation Between Arkema SA and SEB SA
Can any of the company-specific risk be diversified away by investing in both Arkema SA and SEB SA 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 Arkema SA and SEB SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arkema SA and SEB SA, you can compare the effects of market volatilities on Arkema SA and SEB SA 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 Arkema SA with a short position of SEB SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arkema SA and SEB SA.
Diversification Opportunities for Arkema SA and SEB SA
Very poor diversification
The 3 months correlation between Arkema and SEB is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Arkema SA and SEB SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEB SA and Arkema SA 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 Arkema SA are associated (or correlated) with SEB SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEB SA has no effect on the direction of Arkema SA i.e., Arkema SA and SEB SA go up and down completely randomly.
Pair Corralation between Arkema SA and SEB SA
Assuming the 90 days trading horizon Arkema SA is expected to generate 0.95 times more return on investment than SEB SA. However, Arkema SA is 1.06 times less risky than SEB SA. It trades about -0.03 of its potential returns per unit of risk. SEB SA is currently generating about -0.03 per unit of risk. If you would invest 8,890 in Arkema SA on September 2, 2024 and sell it today you would lose (1,390) from holding Arkema SA or give up 15.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arkema SA vs. SEB SA
Performance |
| Timeline |
| Arkema SA |
| SEB SA |
Arkema SA and SEB SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arkema SA and SEB SA
The main advantage of trading using opposite Arkema SA and SEB SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arkema SA position performs unexpectedly, SEB SA 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 SEB SA will offset losses from the drop in SEB SA's long position.| Arkema SA vs. Voltalia SA | Arkema SA vs. Ecoslops SA | Arkema SA vs. Agripower France Sa | Arkema SA vs. Enertime SAS |
| SEB SA vs. LVMH Mot Hennessy | SEB SA vs. Danone SA | SEB SA vs. Air Liquide SA | SEB SA vs. Hermes International SCA |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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