Correlation Between Esker SA and Sopra Steria
Can any of the company-specific risk be diversified away by investing in both Esker SA and Sopra Steria 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 Esker SA and Sopra Steria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esker SA and Sopra Steria Group, you can compare the effects of market volatilities on Esker SA and Sopra Steria 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 Esker SA with a short position of Sopra Steria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esker SA and Sopra Steria.
Diversification Opportunities for Esker SA and Sopra Steria
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Esker and Sopra is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Esker SA and Sopra Steria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sopra Steria Group and Esker 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 Esker SA are associated (or correlated) with Sopra Steria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sopra Steria Group has no effect on the direction of Esker SA i.e., Esker SA and Sopra Steria go up and down completely randomly.
Pair Corralation between Esker SA and Sopra Steria
Assuming the 90 days trading horizon Esker SA is expected to under-perform the Sopra Steria. But the stock apears to be less risky and, when comparing its historical volatility, Esker SA is 6.86 times less risky than Sopra Steria. The stock trades about -0.14 of its potential returns per unit of risk. The Sopra Steria Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 17,310 in Sopra Steria Group on August 30, 2024 and sell it today you would earn a total of 320.00 from holding Sopra Steria Group or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esker SA vs. Sopra Steria Group
Performance |
| Timeline |
| Esker SA |
| Sopra Steria Group |
Esker SA and Sopra Steria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esker SA and Sopra Steria
The main advantage of trading using opposite Esker SA and Sopra Steria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esker SA position performs unexpectedly, Sopra Steria 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 Sopra Steria will offset losses from the drop in Sopra Steria's long position.| Esker SA vs. Sartorius Stedim Biotech | Esker SA vs. Lectra SA | Esker SA vs. Teleperformance SE | Esker SA vs. Trigano SA |
| Sopra Steria vs. Alten SA | Sopra Steria vs. Capgemini SE | Sopra Steria vs. Atos SE | Sopra Steria vs. Trigano 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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