Correlation Between Societe Generale and Boiron SA
Can any of the company-specific risk be diversified away by investing in both Societe Generale and Boiron 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 Boiron 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 Boiron SA, you can compare the effects of market volatilities on Societe Generale and Boiron 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 Boiron SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Societe Generale and Boiron SA.
Diversification Opportunities for Societe Generale and Boiron SA
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Societe and Boiron is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Societe Generale SA and Boiron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boiron 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 Boiron SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boiron SA has no effect on the direction of Societe Generale i.e., Societe Generale and Boiron SA go up and down completely randomly.
Pair Corralation between Societe Generale and Boiron SA
Assuming the 90 days trading horizon Societe Generale SA is expected to generate 1.02 times more return on investment than Boiron SA. However, Societe Generale is 1.02 times more volatile than Boiron SA. It trades about 0.19 of its potential returns per unit of risk. Boiron SA is currently generating about -0.15 per unit of risk. If you would invest 2,372 in Societe Generale SA on October 25, 2024 and sell it today you would earn a total of 627.00 from holding Societe Generale SA or generate 26.43% 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. Boiron SA
Performance |
| Timeline |
| Societe Generale |
| Boiron SA |
Societe Generale and Boiron SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Societe Generale and Boiron SA
The main advantage of trading using opposite Societe Generale and Boiron SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Societe Generale position performs unexpectedly, Boiron 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 Boiron SA will offset losses from the drop in Boiron 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 |
| Boiron SA vs. Virbac SA | Boiron SA vs. Bonduelle SCA | Boiron SA vs. Biomerieux SA | Boiron SA vs. Guerbet S A |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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