Correlation Between Bureau Veritas and Sodexo SA
Can any of the company-specific risk be diversified away by investing in both Bureau Veritas and Sodexo 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 Bureau Veritas and Sodexo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bureau Veritas SA and Sodexo SA, you can compare the effects of market volatilities on Bureau Veritas and Sodexo 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 Bureau Veritas with a short position of Sodexo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bureau Veritas and Sodexo SA.
Diversification Opportunities for Bureau Veritas and Sodexo SA
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bureau and Sodexo is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bureau Veritas SA and Sodexo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sodexo SA and Bureau Veritas 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 Bureau Veritas SA are associated (or correlated) with Sodexo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sodexo SA has no effect on the direction of Bureau Veritas i.e., Bureau Veritas and Sodexo SA go up and down completely randomly.
Pair Corralation between Bureau Veritas and Sodexo SA
Assuming the 90 days trading horizon Bureau Veritas SA is expected to under-perform the Sodexo SA. But the stock apears to be less risky and, when comparing its historical volatility, Bureau Veritas SA is 1.03 times less risky than Sodexo SA. The stock trades about -0.11 of its potential returns per unit of risk. The Sodexo SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 8,115 in Sodexo SA on August 25, 2024 and sell it today you would lose (40.00) from holding Sodexo SA or give up 0.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bureau Veritas SA vs. Sodexo SA
Performance |
| Timeline |
| Bureau Veritas SA |
| Sodexo SA |
Bureau Veritas and Sodexo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bureau Veritas and Sodexo SA
The main advantage of trading using opposite Bureau Veritas and Sodexo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bureau Veritas position performs unexpectedly, Sodexo 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 Sodexo SA will offset losses from the drop in Sodexo SA's long position.| Bureau Veritas vs. Edenred SA | Bureau Veritas vs. Legrand SA | Bureau Veritas vs. Sodexo SA | Bureau Veritas vs. Wendel |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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