Correlation Between NYSE Composite and Société Générale
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Société Générale 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 NYSE Composite and Société Générale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Socit Gnrale Socit, you can compare the effects of market volatilities on NYSE Composite and Société Générale 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 NYSE Composite with a short position of Société Générale. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Société Générale.
Diversification Opportunities for NYSE Composite and Société Générale
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Société is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit and NYSE Composite 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 NYSE Composite are associated (or correlated) with Société Générale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of NYSE Composite i.e., NYSE Composite and Société Générale go up and down completely randomly.
Pair Corralation between NYSE Composite and Société Générale
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Société Générale. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 8.78 times less risky than Société Générale. The index trades about -0.02 of its potential returns per unit of risk. The Socit Gnrale Socit is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,996 in Socit Gnrale Socit on November 28, 2024 and sell it today you would earn a total of 860.00 from holding Socit Gnrale Socit or generate 28.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Socit Gnrale Socit
Performance |
| Timeline |
NYSE Composite and Société Générale Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Socit Gnrale Socit
Pair trading matchups for Société Générale
Pair Trading with NYSE Composite and Société Générale
The main advantage of trading using opposite NYSE Composite and Société Générale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Société Générale 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 Société Générale will offset losses from the drop in Société Générale's long position.| NYSE Composite vs. Inter Parfums | NYSE Composite vs. Amkor Technology | NYSE Composite vs. Unilever PLC ADR | NYSE Composite vs. Estee Lauder Companies |
| Société Générale vs. Banco Bradesco SA | Société Générale vs. Itau Unibanco Banco | Société Générale vs. Lloyds Banking Group | Société Générale vs. Deutsche Bank AG |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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