Correlation Between Infotel SA and SQLI SA
Can any of the company-specific risk be diversified away by investing in both Infotel SA and SQLI 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 Infotel SA and SQLI SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infotel SA and SQLI SA, you can compare the effects of market volatilities on Infotel SA and SQLI 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 Infotel SA with a short position of SQLI SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infotel SA and SQLI SA.
Diversification Opportunities for Infotel SA and SQLI SA
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Infotel and SQLI is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Infotel SA and SQLI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SQLI SA and Infotel SA 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 Infotel SA are associated (or correlated) with SQLI SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SQLI SA has no effect on the direction of Infotel SA i.e., Infotel SA and SQLI SA go up and down completely randomly.
Pair Corralation between Infotel SA and SQLI SA
Assuming the 90 days trading horizon Infotel SA is expected to generate 0.95 times more return on investment than SQLI SA. However, Infotel SA is 1.06 times less risky than SQLI SA. It trades about 0.25 of its potential returns per unit of risk. SQLI SA is currently generating about 0.12 per unit of risk. If you would invest 4,210 in Infotel SA on August 25, 2024 and sell it today you would earn a total of 80.00 from holding Infotel SA or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Infotel SA vs. SQLI SA
Performance |
| Timeline |
| Infotel SA |
| SQLI SA |
Infotel SA and SQLI SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infotel SA and SQLI SA
The main advantage of trading using opposite Infotel SA and SQLI SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infotel SA position performs unexpectedly, SQLI 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 SQLI SA will offset losses from the drop in SQLI SA's long position.The idea behind Infotel SA and SQLI SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SQLI SA vs. Sword Group SE | SQLI SA vs. Neurones | SQLI SA vs. Sopra Steria Group | SQLI SA vs. Linedata Services 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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