Correlation Between Solocal Group and Marie Brizard
Can any of the company-specific risk be diversified away by investing in both Solocal Group and Marie Brizard 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 Marie Brizard 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 Marie Brizard Wine, you can compare the effects of market volatilities on Solocal Group and Marie Brizard 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 Marie Brizard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solocal Group and Marie Brizard.
Diversification Opportunities for Solocal Group and Marie Brizard
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Solocal and Marie is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Solocal Group SA and Marie Brizard Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marie Brizard Wine 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 Marie Brizard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marie Brizard Wine has no effect on the direction of Solocal Group i.e., Solocal Group and Marie Brizard go up and down completely randomly.
Pair Corralation between Solocal Group and Marie Brizard
Assuming the 90 days trading horizon Solocal Group SA is expected to generate 37.64 times more return on investment than Marie Brizard. However, Solocal Group is 37.64 times more volatile than Marie Brizard Wine. It trades about 0.04 of its potential returns per unit of risk. Marie Brizard Wine is currently generating about 0.07 per unit of risk. If you would invest 793.00 in Solocal Group SA on November 28, 2024 and sell it today you would lose (568.00) from holding Solocal Group SA or give up 71.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Solocal Group SA vs. Marie Brizard Wine
Performance |
| Timeline |
| Solocal Group SA |
| Marie Brizard Wine |
Solocal Group and Marie Brizard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solocal Group and Marie Brizard
The main advantage of trading using opposite Solocal Group and Marie Brizard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solocal Group position performs unexpectedly, Marie Brizard 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 Marie Brizard will offset losses from the drop in Marie Brizard's long position.| Solocal Group vs. Vallourec | Solocal Group vs. Genfit | Solocal Group vs. Innate Pharma | Solocal Group vs. Etablissements Maurel et |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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