Correlation Between Alstom SA and Synergie
Can any of the company-specific risk be diversified away by investing in both Alstom SA and Synergie 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 Alstom SA and Synergie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alstom SA and Synergie SE, you can compare the effects of market volatilities on Alstom SA and Synergie 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 Alstom SA with a short position of Synergie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstom SA and Synergie.
Diversification Opportunities for Alstom SA and Synergie
Pay attention - limited upside
The 3 months correlation between Alstom and Synergie is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alstom SA and Synergie SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synergie SE and Alstom 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 Alstom SA are associated (or correlated) with Synergie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synergie SE has no effect on the direction of Alstom SA i.e., Alstom SA and Synergie go up and down completely randomly.
Pair Corralation between Alstom SA and Synergie
Assuming the 90 days trading horizon Alstom SA is expected to generate 3.2 times more return on investment than Synergie. However, Alstom SA is 3.2 times more volatile than Synergie SE. It trades about 0.06 of its potential returns per unit of risk. Synergie SE is currently generating about -0.44 per unit of risk. If you would invest 2,029 in Alstom SA on August 29, 2024 and sell it today you would earn a total of 61.00 from holding Alstom SA or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alstom SA vs. Synergie SE
Performance |
| Timeline |
| Alstom SA |
| Synergie SE |
Alstom SA and Synergie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstom SA and Synergie
The main advantage of trading using opposite Alstom SA and Synergie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstom SA position performs unexpectedly, Synergie 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 Synergie will offset losses from the drop in Synergie's long position.| Alstom SA vs. Bouygues SA | Alstom SA vs. Compagnie de Saint Gobain | Alstom SA vs. Veolia Environnement VE | Alstom SA vs. Vinci 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |