Correlation Between Manitou BF and Soitec SA
Can any of the company-specific risk be diversified away by investing in both Manitou BF and Soitec 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 Manitou BF and Soitec SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitou BF SA and Soitec SA, you can compare the effects of market volatilities on Manitou BF and Soitec 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 Manitou BF with a short position of Soitec SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and Soitec SA.
Diversification Opportunities for Manitou BF and Soitec SA
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Manitou and Soitec is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Soitec SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soitec SA and Manitou BF 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 Manitou BF SA are associated (or correlated) with Soitec SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soitec SA has no effect on the direction of Manitou BF i.e., Manitou BF and Soitec SA go up and down completely randomly.
Pair Corralation between Manitou BF and Soitec SA
Assuming the 90 days trading horizon Manitou BF SA is expected to under-perform the Soitec SA. But the stock apears to be less risky and, when comparing its historical volatility, Manitou BF SA is 2.01 times less risky than Soitec SA. The stock trades about -0.21 of its potential returns per unit of risk. The Soitec SA is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 7,700 in Soitec SA on August 27, 2024 and sell it today you would lose (380.00) from holding Soitec SA or give up 4.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitou BF SA vs. Soitec SA
Performance |
| Timeline |
| Manitou BF SA |
| Soitec SA |
Manitou BF and Soitec SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitou BF and Soitec SA
The main advantage of trading using opposite Manitou BF and Soitec SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF position performs unexpectedly, Soitec 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 Soitec SA will offset losses from the drop in Soitec SA's long position.| Manitou BF vs. Haulotte Group SA | Manitou BF vs. Trigano SA | Manitou BF vs. Bnteau SA | Manitou BF vs. Derichebourg |
| Soitec SA vs. Kalray SA | Soitec SA vs. Lacroix Group SA | Soitec SA vs. Ekinops SA | Soitec SA vs. Plastiques du Val |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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