Correlation Between Entravision Communications and Société Générale
Can any of the company-specific risk be diversified away by investing in both Entravision Communications and Société Générale 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 Entravision Communications and Société Générale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entravision Communications and Socit Gnrale Socit, you can compare the effects of market volatilities on Entravision Communications and Société Générale 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 Entravision Communications with a short position of Société Générale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entravision Communications and Société Générale.
Diversification Opportunities for Entravision Communications and Société Générale
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Entravision and Société is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit and Entravision Communications 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 Entravision Communications are associated (or correlated) with Société Générale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of Entravision Communications i.e., Entravision Communications and Société Générale go up and down completely randomly.
Pair Corralation between Entravision Communications and Société Générale
Assuming the 90 days horizon Entravision Communications is expected to under-perform the Société Générale. In addition to that, Entravision Communications is 2.05 times more volatile than Socit Gnrale Socit. It trades about -0.01 of its total potential returns per unit of risk. Socit Gnrale Socit is currently generating about 0.03 per unit of volatility. If you would invest 2,128 in Socit Gnrale Socit on August 26, 2024 and sell it today you would earn a total of 467.00 from holding Socit Gnrale Socit or generate 21.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entravision Communications vs. Socit Gnrale Socit
Performance |
| Timeline |
| Entravision Communications |
| Socit Gnrale Socit |
Entravision Communications and Société Générale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entravision Communications and Société Générale
The main advantage of trading using opposite Entravision Communications and Société Générale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entravision Communications position performs unexpectedly, Société Générale 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 Société Générale will offset losses from the drop in Société Générale's long position.| Entravision Communications vs. News Corporation | Entravision Communications vs. NorAm Drilling AS | Entravision Communications vs. Superior Plus Corp | Entravision Communications vs. NMI Holdings |
| Société Générale vs. QBE Insurance Group | Société Générale vs. Summit Materials | Société Générale vs. The Yokohama Rubber | Société Générale vs. GOODYEAR T RUBBER |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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