Correlation Between Rubis SCA and Sanofi SA
Can any of the company-specific risk be diversified away by investing in both Rubis SCA and Sanofi 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 Rubis SCA and Sanofi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubis SCA and Sanofi SA, you can compare the effects of market volatilities on Rubis SCA and Sanofi 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 Rubis SCA with a short position of Sanofi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubis SCA and Sanofi SA.
Diversification Opportunities for Rubis SCA and Sanofi SA
Weak diversification
The 3 months correlation between Rubis and Sanofi is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Rubis SCA and Sanofi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanofi SA and Rubis SCA 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 Rubis SCA are associated (or correlated) with Sanofi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanofi SA has no effect on the direction of Rubis SCA i.e., Rubis SCA and Sanofi SA go up and down completely randomly.
Pair Corralation between Rubis SCA and Sanofi SA
Assuming the 90 days trading horizon Rubis SCA is expected to generate 1.86 times more return on investment than Sanofi SA. However, Rubis SCA is 1.86 times more volatile than Sanofi SA. It trades about 0.04 of its potential returns per unit of risk. Sanofi SA is currently generating about 0.05 per unit of risk. If you would invest 2,018 in Rubis SCA on August 26, 2024 and sell it today you would earn a total of 296.00 from holding Rubis SCA or generate 14.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rubis SCA vs. Sanofi SA
Performance |
| Timeline |
| Rubis SCA |
| Sanofi SA |
Rubis SCA and Sanofi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rubis SCA and Sanofi SA
The main advantage of trading using opposite Rubis SCA and Sanofi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubis SCA position performs unexpectedly, Sanofi 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 Sanofi SA will offset losses from the drop in Sanofi SA's long position.| Rubis SCA vs. Gaztransport Technigaz SAS | Rubis SCA vs. Nexity | Rubis SCA vs. SCOR SE | Rubis SCA vs. TotalEnergies SE |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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