Correlation Between Exel Industries and Societe LDC
Can any of the company-specific risk be diversified away by investing in both Exel Industries and Societe LDC 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 Exel Industries and Societe LDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exel Industries and Societe LDC SA, you can compare the effects of market volatilities on Exel Industries and Societe LDC 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 Exel Industries with a short position of Societe LDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exel Industries and Societe LDC.
Diversification Opportunities for Exel Industries and Societe LDC
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exel and Societe is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Exel Industries and Societe LDC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Societe LDC SA and Exel Industries 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 Exel Industries are associated (or correlated) with Societe LDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Societe LDC SA has no effect on the direction of Exel Industries i.e., Exel Industries and Societe LDC go up and down completely randomly.
Pair Corralation between Exel Industries and Societe LDC
Assuming the 90 days trading horizon Exel Industries is expected to under-perform the Societe LDC. But the stock apears to be less risky and, when comparing its historical volatility, Exel Industries is 1.02 times less risky than Societe LDC. The stock trades about -0.03 of its potential returns per unit of risk. The Societe LDC SA is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 6,580 in Societe LDC SA on November 18, 2024 and sell it today you would lose (142.00) from holding Societe LDC SA or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exel Industries vs. Societe LDC SA
Performance |
| Timeline |
| Exel Industries |
| Societe LDC SA |
Exel Industries and Societe LDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exel Industries and Societe LDC
The main advantage of trading using opposite Exel Industries and Societe LDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exel Industries position performs unexpectedly, Societe LDC 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 Societe LDC will offset losses from the drop in Societe LDC's long position.| Exel Industries vs. Manitou BF SA | Exel Industries vs. NRJ Group | Exel Industries vs. Etablissements Maurel et | Exel Industries vs. Trigano SA |
| Societe LDC vs. Acheter Louer | Societe LDC vs. Avenir Telecom SA | Societe LDC vs. DBT SA | Societe LDC vs. Europlasma 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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