Correlation Between Societe De and Gecina SA
Can any of the company-specific risk be diversified away by investing in both Societe De and Gecina 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 Societe De and Gecina SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Societe de la and Gecina SA, you can compare the effects of market volatilities on Societe De and Gecina 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 Societe De with a short position of Gecina SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Societe De and Gecina SA.
Diversification Opportunities for Societe De and Gecina SA
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Societe and Gecina is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Societe de la and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA and Societe De 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 Societe de la are associated (or correlated) with Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of Societe De i.e., Societe De and Gecina SA go up and down completely randomly.
Pair Corralation between Societe De and Gecina SA
Assuming the 90 days trading horizon Societe de la is expected to under-perform the Gecina SA. In addition to that, Societe De is 3.43 times more volatile than Gecina SA. It trades about -0.44 of its total potential returns per unit of risk. Gecina SA is currently generating about -0.25 per unit of volatility. If you would invest 10,200 in Gecina SA on August 24, 2024 and sell it today you would lose (720.00) from holding Gecina SA or give up 7.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Societe de la vs. Gecina SA
Performance |
| Timeline |
| Societe de la |
| Gecina SA |
Societe De and Gecina SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Societe De and Gecina SA
The main advantage of trading using opposite Societe De and Gecina SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Societe De position performs unexpectedly, Gecina 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 Gecina SA will offset losses from the drop in Gecina SA's long position.| Societe De vs. Mercialys SA | Societe De vs. Icade SA | Societe De vs. Gecina SA | Societe De vs. Altarea SCA |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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