Correlation Between Union Technologies and Soditech
Can any of the company-specific risk be diversified away by investing in both Union Technologies and Soditech 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 Union Technologies and Soditech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Technologies Informatique and Soditech SA, you can compare the effects of market volatilities on Union Technologies and Soditech 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 Union Technologies with a short position of Soditech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Technologies and Soditech.
Diversification Opportunities for Union Technologies and Soditech
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Union and Soditech is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Union Technologies Informatiqu and Soditech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soditech SA and Union Technologies 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 Union Technologies Informatique are associated (or correlated) with Soditech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soditech SA has no effect on the direction of Union Technologies i.e., Union Technologies and Soditech go up and down completely randomly.
Pair Corralation between Union Technologies and Soditech
Assuming the 90 days trading horizon Union Technologies Informatique is expected to under-perform the Soditech. In addition to that, Union Technologies is 9.44 times more volatile than Soditech SA. It trades about -0.05 of its total potential returns per unit of risk. Soditech SA is currently generating about -0.21 per unit of volatility. If you would invest 127.00 in Soditech SA on September 13, 2024 and sell it today you would lose (2.00) from holding Soditech SA or give up 1.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Technologies Informatiqu vs. Soditech SA
Performance |
| Timeline |
| Union Technologies |
| Soditech SA |
Union Technologies and Soditech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Technologies and Soditech
The main advantage of trading using opposite Union Technologies and Soditech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Technologies position performs unexpectedly, Soditech 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 Soditech will offset losses from the drop in Soditech's long position.| Union Technologies vs. Linedata Services SA | Union Technologies vs. Lectra SA | Union Technologies vs. Manitou BF SA | Union Technologies vs. Ossiam Minimum Variance |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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