Correlation Between Neurones and Sopra Steria
Can any of the company-specific risk be diversified away by investing in both Neurones and Sopra Steria 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 Neurones and Sopra Steria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neurones and Sopra Steria Group, you can compare the effects of market volatilities on Neurones and Sopra Steria 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 Neurones with a short position of Sopra Steria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neurones and Sopra Steria.
Diversification Opportunities for Neurones and Sopra Steria
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neurones and Sopra is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Neurones and Sopra Steria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sopra Steria Group and Neurones 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 Neurones are associated (or correlated) with Sopra Steria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sopra Steria Group has no effect on the direction of Neurones i.e., Neurones and Sopra Steria go up and down completely randomly.
Pair Corralation between Neurones and Sopra Steria
Assuming the 90 days trading horizon Neurones is expected to under-perform the Sopra Steria. But the stock apears to be less risky and, when comparing its historical volatility, Neurones is 1.75 times less risky than Sopra Steria. The stock trades about -0.16 of its potential returns per unit of risk. The Sopra Steria Group is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 18,150 in Sopra Steria Group on August 25, 2024 and sell it today you would lose (300.00) from holding Sopra Steria Group or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neurones vs. Sopra Steria Group
Performance |
| Timeline |
| Neurones |
| Sopra Steria Group |
Neurones and Sopra Steria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neurones and Sopra Steria
The main advantage of trading using opposite Neurones and Sopra Steria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neurones position performs unexpectedly, Sopra Steria 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 Sopra Steria will offset losses from the drop in Sopra Steria's long position.The idea behind Neurones and Sopra Steria Group 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.| Sopra Steria vs. Neurones | Sopra Steria vs. Infotel SA | Sopra Steria vs. Alten SA | Sopra Steria vs. Manitou BF 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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