Correlation Between Poulaillon and Solocal Group
Can any of the company-specific risk be diversified away by investing in both Poulaillon and Solocal Group 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 Poulaillon and Solocal Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Poulaillon SA and Solocal Group SA, you can compare the effects of market volatilities on Poulaillon and Solocal Group 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 Poulaillon with a short position of Solocal Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poulaillon and Solocal Group.
Diversification Opportunities for Poulaillon and Solocal Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Poulaillon and Solocal is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Poulaillon SA and Solocal Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solocal Group SA and Poulaillon 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 Poulaillon SA are associated (or correlated) with Solocal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solocal Group SA has no effect on the direction of Poulaillon i.e., Poulaillon and Solocal Group go up and down completely randomly.
Pair Corralation between Poulaillon and Solocal Group
Assuming the 90 days trading horizon Poulaillon is expected to generate 12.56 times less return on investment than Solocal Group. But when comparing it to its historical volatility, Poulaillon SA is 21.49 times less risky than Solocal Group. It trades about 0.04 of its potential returns per unit of risk. Solocal Group SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,176 in Solocal Group SA on September 4, 2024 and sell it today you would lose (4,897) from holding Solocal Group SA or give up 94.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.63% |
| Values | Daily Returns |
Poulaillon SA vs. Solocal Group SA
Performance |
| Timeline |
| Poulaillon SA |
| Solocal Group SA |
Poulaillon and Solocal Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poulaillon and Solocal Group
The main advantage of trading using opposite Poulaillon and Solocal Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poulaillon position performs unexpectedly, Solocal Group 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 Solocal Group will offset losses from the drop in Solocal Group's long position.| Poulaillon vs. Piscines Desjoyaux SA | Poulaillon vs. Lectra SA | Poulaillon vs. Cogra 48 Socit | Poulaillon vs. Moulinvest |
| Solocal Group vs. Spineguard | Solocal Group vs. Vallourec | Solocal Group vs. Manitou BF SA | Solocal Group vs. Ossiam Minimum Variance |
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 Stocks Directory module to find actively traded stocks across global markets.
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