Correlation Between Socit BIC and Caisse Rgionale
Can any of the company-specific risk be diversified away by investing in both Socit BIC and Caisse Rgionale 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 Socit BIC and Caisse Rgionale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Socit BIC SA and Caisse Rgionale du, you can compare the effects of market volatilities on Socit BIC and Caisse Rgionale 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 Socit BIC with a short position of Caisse Rgionale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Socit BIC and Caisse Rgionale.
Diversification Opportunities for Socit BIC and Caisse Rgionale
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Socit and Caisse is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Socit BIC SA and Caisse Rgionale du in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caisse Rgionale du and Socit BIC 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 Socit BIC SA are associated (or correlated) with Caisse Rgionale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caisse Rgionale du has no effect on the direction of Socit BIC i.e., Socit BIC and Caisse Rgionale go up and down completely randomly.
Pair Corralation between Socit BIC and Caisse Rgionale
Assuming the 90 days horizon Socit BIC SA is expected to generate 1.28 times more return on investment than Caisse Rgionale. However, Socit BIC is 1.28 times more volatile than Caisse Rgionale du. It trades about 0.04 of its potential returns per unit of risk. Caisse Rgionale du is currently generating about 0.04 per unit of risk. If you would invest 5,060 in Socit BIC SA on August 29, 2024 and sell it today you would earn a total of 1,150 from holding Socit BIC SA or generate 22.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Socit BIC SA vs. Caisse Rgionale du
Performance |
| Timeline |
| Socit BIC SA |
| Caisse Rgionale du |
Socit BIC and Caisse Rgionale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Socit BIC and Caisse Rgionale
The main advantage of trading using opposite Socit BIC and Caisse Rgionale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Socit BIC position performs unexpectedly, Caisse Rgionale 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 Caisse Rgionale will offset losses from the drop in Caisse Rgionale's long position.| Socit BIC vs. Remy Cointreau | Socit BIC vs. Alten SA | Socit BIC vs. Gaztransport Technigaz SAS | Socit BIC vs. Trigano SA |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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