Correlation Between Compagnie and Sofina Socit
Can any of the company-specific risk be diversified away by investing in both Compagnie and Sofina Socit 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 Compagnie and Sofina Socit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie du Bois and Sofina Socit Anonyme, you can compare the effects of market volatilities on Compagnie and Sofina Socit 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 Compagnie with a short position of Sofina Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Sofina Socit.
Diversification Opportunities for Compagnie and Sofina Socit
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compagnie and Sofina is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie du Bois and Sofina Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofina Socit Anonyme and Compagnie 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 Compagnie du Bois are associated (or correlated) with Sofina Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofina Socit Anonyme has no effect on the direction of Compagnie i.e., Compagnie and Sofina Socit go up and down completely randomly.
Pair Corralation between Compagnie and Sofina Socit
Assuming the 90 days trading horizon Compagnie du Bois is expected to under-perform the Sofina Socit. In addition to that, Compagnie is 1.07 times more volatile than Sofina Socit Anonyme. It trades about -0.03 of its total potential returns per unit of risk. Sofina Socit Anonyme is currently generating about 0.04 per unit of volatility. If you would invest 21,301 in Sofina Socit Anonyme on November 3, 2024 and sell it today you would earn a total of 2,859 from holding Sofina Socit Anonyme or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Compagnie du Bois vs. Sofina Socit Anonyme
Performance |
| Timeline |
| Compagnie du Bois |
| Sofina Socit Anonyme |
Compagnie and Sofina Socit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Sofina Socit
The main advantage of trading using opposite Compagnie and Sofina Socit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Sofina Socit 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 Sofina Socit will offset losses from the drop in Sofina Socit's long position.| Compagnie vs. Brederode SA | Compagnie vs. GIMV NV | Compagnie vs. Ackermans Van Haaren | Compagnie vs. Groep Brussel Lambert |
| Sofina Socit vs. Keyware Technologies NV | Sofina Socit vs. Onward Medical NV | Sofina Socit vs. EVS Broadcast Equipment | Sofina Socit vs. Ion Beam Applications |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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