Correlation Between Socit BIC and Rallye SA
Can any of the company-specific risk be diversified away by investing in both Socit BIC and Rallye SA 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 Rallye SA 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 Rallye SA, you can compare the effects of market volatilities on Socit BIC and Rallye SA 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 Rallye SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Socit BIC and Rallye SA.
Diversification Opportunities for Socit BIC and Rallye SA
Pay attention - limited upside
The 3 months correlation between Socit and Rallye is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Socit BIC SA and Rallye SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rallye SA 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 Rallye SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rallye SA has no effect on the direction of Socit BIC i.e., Socit BIC and Rallye SA go up and down completely randomly.
Pair Corralation between Socit BIC and Rallye SA
Assuming the 90 days horizon Socit BIC SA is expected to generate 0.1 times more return on investment than Rallye SA. However, Socit BIC SA is 10.34 times less risky than Rallye SA. It trades about 0.02 of its potential returns per unit of risk. Rallye SA is currently generating about 0.0 per unit of risk. If you would invest 5,746 in Socit BIC SA on October 9, 2024 and sell it today you would earn a total of 594.00 from holding Socit BIC SA or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Socit BIC SA vs. Rallye SA
Performance |
| Timeline |
| Socit BIC SA |
| Rallye SA |
Socit BIC and Rallye SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Socit BIC and Rallye SA
The main advantage of trading using opposite Socit BIC and Rallye SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Socit BIC position performs unexpectedly, Rallye SA 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 Rallye SA will offset losses from the drop in Rallye SA's long position.| Socit BIC vs. Imerys SA | Socit BIC vs. Casino Guichard Perrachon | Socit BIC vs. SEB SA | Socit BIC vs. Sodexo SA |
| Rallye SA vs. Casino Guichard Perrachon | Rallye SA vs. Lagardere SCA | Rallye SA vs. Mercialys SA | Rallye SA vs. Nexity |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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