Correlation Between Broadpeak and Sogeclair
Can any of the company-specific risk be diversified away by investing in both Broadpeak and Sogeclair 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 Broadpeak and Sogeclair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadpeak SA and Sogeclair SA, you can compare the effects of market volatilities on Broadpeak and Sogeclair 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 Broadpeak with a short position of Sogeclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadpeak and Sogeclair.
Diversification Opportunities for Broadpeak and Sogeclair
Very poor diversification
The 3 months correlation between Broadpeak and Sogeclair is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Broadpeak SA and Sogeclair SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sogeclair SA and Broadpeak 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 Broadpeak SA are associated (or correlated) with Sogeclair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sogeclair SA has no effect on the direction of Broadpeak i.e., Broadpeak and Sogeclair go up and down completely randomly.
Pair Corralation between Broadpeak and Sogeclair
Assuming the 90 days trading horizon Broadpeak SA is expected to under-perform the Sogeclair. But the stock apears to be less risky and, when comparing its historical volatility, Broadpeak SA is 1.0 times less risky than Sogeclair. The stock trades about -0.21 of its potential returns per unit of risk. The Sogeclair SA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 2,300 in Sogeclair SA on September 2, 2024 and sell it today you would lose (495.00) from holding Sogeclair SA or give up 21.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadpeak SA vs. Sogeclair SA
Performance |
| Timeline |
| Broadpeak SA |
| Sogeclair SA |
Broadpeak and Sogeclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadpeak and Sogeclair
The main advantage of trading using opposite Broadpeak and Sogeclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadpeak position performs unexpectedly, Sogeclair 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 Sogeclair will offset losses from the drop in Sogeclair's long position.| Broadpeak vs. Eurobio Scientific SA | Broadpeak vs. Riber SA | Broadpeak vs. Manitou BF SA | Broadpeak vs. Ossiam Minimum Variance |
| Sogeclair vs. LVMH Mot Hennessy | Sogeclair vs. LOreal SA | Sogeclair vs. Hermes International SCA | Sogeclair vs. Manitou BF SA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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