Correlation Between Solocal Group and Claranova
Can any of the company-specific risk be diversified away by investing in both Solocal Group and Claranova 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 Solocal Group and Claranova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solocal Group SA and Claranova SE, you can compare the effects of market volatilities on Solocal Group and Claranova 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 Solocal Group with a short position of Claranova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solocal Group and Claranova.
Diversification Opportunities for Solocal Group and Claranova
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solocal and Claranova is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Solocal Group SA and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE and Solocal Group 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 Solocal Group SA are associated (or correlated) with Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of Solocal Group i.e., Solocal Group and Claranova go up and down completely randomly.
Pair Corralation between Solocal Group and Claranova
Assuming the 90 days trading horizon Solocal Group SA is expected to under-perform the Claranova. But the stock apears to be less risky and, when comparing its historical volatility, Solocal Group SA is 1.78 times less risky than Claranova. The stock trades about -0.49 of its potential returns per unit of risk. The Claranova SE is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 124.00 in Claranova SE on November 3, 2024 and sell it today you would earn a total of 18.00 from holding Claranova SE or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solocal Group SA vs. Claranova SE
Performance |
| Timeline |
| Solocal Group SA |
| Claranova SE |
Solocal Group and Claranova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solocal Group and Claranova
The main advantage of trading using opposite Solocal Group and Claranova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solocal Group position performs unexpectedly, Claranova 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 Claranova will offset losses from the drop in Claranova's long position.| Solocal Group vs. Vallourec | Solocal Group vs. Genfit | Solocal Group vs. Innate Pharma | Solocal Group vs. Etablissements Maurel et |
| Claranova vs. Solutions 30 SE | Claranova vs. BigBen Interactive | Claranova vs. SA Catana Group | Claranova vs. Solocal Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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