Correlation Between Astar and Séché Environnement
Can any of the company-specific risk be diversified away by investing in both Astar and Séché Environnement 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 Astar and Séché Environnement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Sch Environnement SA, you can compare the effects of market volatilities on Astar and Séché Environnement 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 Astar with a short position of Séché Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Séché Environnement.
Diversification Opportunities for Astar and Séché Environnement
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astar and Séché is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Sch Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Séché Environnement and Astar 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 Astar are associated (or correlated) with Séché Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Séché Environnement has no effect on the direction of Astar i.e., Astar and Séché Environnement go up and down completely randomly.
Pair Corralation between Astar and Séché Environnement
Assuming the 90 days trading horizon Astar is expected to under-perform the Séché Environnement. In addition to that, Astar is 3.34 times more volatile than Sch Environnement SA. It trades about -0.15 of its total potential returns per unit of risk. Sch Environnement SA is currently generating about -0.01 per unit of volatility. If you would invest 7,800 in Sch Environnement SA on October 13, 2024 and sell it today you would lose (40.00) from holding Sch Environnement SA or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Astar vs. Sch Environnement SA
Performance |
| Timeline |
| Astar |
| Séché Environnement |
Astar and Séché Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Séché Environnement
The main advantage of trading using opposite Astar and Séché Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Séché Environnement 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 Séché Environnement will offset losses from the drop in Séché Environnement's long position.The idea behind Astar and Sch Environnement SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Séché Environnement vs. EAGLE MATERIALS | Séché Environnement vs. Applied Materials | Séché Environnement vs. VULCAN MATERIALS | Séché Environnement vs. SILVER BULLET DATA |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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