Correlation Between Edenred SA and Sodexo SA
Can any of the company-specific risk be diversified away by investing in both Edenred SA 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 Edenred SA and Sodexo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edenred SA and Sodexo SA, you can compare the effects of market volatilities on Edenred SA 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 Edenred SA with a short position of Sodexo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edenred SA and Sodexo SA.
Diversification Opportunities for Edenred SA and Sodexo SA
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Edenred and Sodexo is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Edenred SA and Sodexo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sodexo SA and Edenred SA 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 Edenred 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 Edenred SA i.e., Edenred SA and Sodexo SA go up and down completely randomly.
Pair Corralation between Edenred SA and Sodexo SA
Assuming the 90 days trading horizon Edenred SA is expected to generate 0.87 times more return on investment than Sodexo SA. However, Edenred SA is 1.14 times less risky than Sodexo SA. It trades about 0.11 of its potential returns per unit of risk. Sodexo SA is currently generating about -0.24 per unit of risk. If you would invest 3,024 in Edenred SA on October 20, 2024 and sell it today you would earn a total of 111.00 from holding Edenred SA or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edenred SA vs. Sodexo SA
Performance |
| Timeline |
| Edenred SA |
| Sodexo SA |
Edenred SA and Sodexo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edenred SA and Sodexo SA
The main advantage of trading using opposite Edenred SA and Sodexo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edenred SA 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.| Edenred SA vs. Bureau Veritas SA | Edenred SA vs. Sodexo SA | Edenred SA vs. Legrand SA | Edenred SA vs. Accor S A |
| Sodexo SA vs. Accor S A | Sodexo SA vs. Publicis Groupe SA | Sodexo SA vs. Legrand SA | Sodexo SA vs. Pernod Ricard SA |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |