Correlation Between Hermes International and Sogeclair
Can any of the company-specific risk be diversified away by investing in both Hermes International and Sogeclair 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 Hermes International and Sogeclair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hermes International SCA and Sogeclair SA, you can compare the effects of market volatilities on Hermes International and Sogeclair 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 Hermes International with a short position of Sogeclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hermes International and Sogeclair.
Diversification Opportunities for Hermes International and Sogeclair
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hermes and Sogeclair is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hermes International SCA and Sogeclair SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sogeclair SA and Hermes International 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 Hermes International SCA are associated (or correlated) with Sogeclair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sogeclair SA has no effect on the direction of Hermes International i.e., Hermes International and Sogeclair go up and down completely randomly.
Pair Corralation between Hermes International and Sogeclair
Assuming the 90 days trading horizon Hermes International SCA is expected to under-perform the Sogeclair. In addition to that, Hermes International is 1.11 times more volatile than Sogeclair SA. It trades about -0.06 of its total potential returns per unit of risk. Sogeclair SA is currently generating about 0.23 per unit of volatility. If you would invest 1,700 in Sogeclair SA on August 28, 2024 and sell it today you would earn a total of 130.00 from holding Sogeclair SA or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hermes International SCA vs. Sogeclair SA
Performance |
| Timeline |
| Hermes International SCA |
| Sogeclair SA |
Hermes International and Sogeclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hermes International and Sogeclair
The main advantage of trading using opposite Hermes International and Sogeclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hermes International position performs unexpectedly, Sogeclair 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 Sogeclair will offset losses from the drop in Sogeclair's long position.| Hermes International vs. Kering SA | Hermes International vs. LVMH Mot Hennessy | Hermes International vs. LOreal SA | Hermes International vs. Christian Dior SE |
| Sogeclair vs. LVMH Mot Hennessy | Sogeclair vs. LOreal SA | Sogeclair vs. Hermes International SCA | Sogeclair 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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