Correlation Between Sogeclair and Nexity
Can any of the company-specific risk be diversified away by investing in both Sogeclair and Nexity 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 Sogeclair and Nexity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sogeclair SA and Nexity, you can compare the effects of market volatilities on Sogeclair and Nexity 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 Sogeclair with a short position of Nexity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sogeclair and Nexity.
Diversification Opportunities for Sogeclair and Nexity
Very good diversification
The 3 months correlation between Sogeclair and Nexity is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sogeclair SA and Nexity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexity and Sogeclair 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 Sogeclair SA are associated (or correlated) with Nexity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexity has no effect on the direction of Sogeclair i.e., Sogeclair and Nexity go up and down completely randomly.
Pair Corralation between Sogeclair and Nexity
Assuming the 90 days trading horizon Sogeclair SA is expected to under-perform the Nexity. But the stock apears to be less risky and, when comparing its historical volatility, Sogeclair SA is 1.84 times less risky than Nexity. The stock trades about -0.15 of its potential returns per unit of risk. The Nexity is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,285 in Nexity on November 5, 2024 and sell it today you would earn a total of 11.00 from holding Nexity or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sogeclair SA vs. Nexity
Performance |
| Timeline |
| Sogeclair SA |
| Nexity |
Sogeclair and Nexity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sogeclair and Nexity
The main advantage of trading using opposite Sogeclair and Nexity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sogeclair position performs unexpectedly, Nexity 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 Nexity will offset losses from the drop in Nexity's long position.| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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