Correlation Between Societe Generale and Keyrus SA
Can any of the company-specific risk be diversified away by investing in both Societe Generale and Keyrus 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 Generale and Keyrus SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Societe Generale SA and Keyrus SA, you can compare the effects of market volatilities on Societe Generale and Keyrus 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 Generale with a short position of Keyrus SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Societe Generale and Keyrus SA.
Diversification Opportunities for Societe Generale and Keyrus SA
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Societe and Keyrus is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Societe Generale SA and Keyrus SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyrus SA and Societe Generale 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 Generale SA are associated (or correlated) with Keyrus SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyrus SA has no effect on the direction of Societe Generale i.e., Societe Generale and Keyrus SA go up and down completely randomly.
Pair Corralation between Societe Generale and Keyrus SA
Assuming the 90 days trading horizon Societe Generale SA is expected to generate 2.4 times more return on investment than Keyrus SA. However, Societe Generale is 2.4 times more volatile than Keyrus SA. It trades about 0.09 of its potential returns per unit of risk. Keyrus SA is currently generating about -0.13 per unit of risk. If you would invest 2,380 in Societe Generale SA on August 30, 2024 and sell it today you would earn a total of 120.00 from holding Societe Generale SA or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Societe Generale SA vs. Keyrus SA
Performance |
| Timeline |
| Societe Generale |
| Keyrus SA |
Societe Generale and Keyrus SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Societe Generale and Keyrus SA
The main advantage of trading using opposite Societe Generale and Keyrus SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Societe Generale position performs unexpectedly, Keyrus 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 Keyrus SA will offset losses from the drop in Keyrus SA's long position.| Societe Generale vs. BNP Paribas SA | Societe Generale vs. Credit Agricole SA | Societe Generale vs. AXA SA | Societe Generale vs. Renault SA |
| Keyrus SA vs. Itissalat Al Maghrib | Keyrus SA vs. LleidaNetworks Serveis Telemtics | Keyrus SA vs. Bd Multimedia |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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