Correlation Between Safran SA and IDS France
Can any of the company-specific risk be diversified away by investing in both Safran SA and IDS France 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 Safran SA and IDS France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safran SA and IDS France SAS, you can compare the effects of market volatilities on Safran SA and IDS France 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 Safran SA with a short position of IDS France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safran SA and IDS France.
Diversification Opportunities for Safran SA and IDS France
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Safran and IDS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Safran SA and IDS France SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDS France SAS and Safran SA 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 Safran SA are associated (or correlated) with IDS France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDS France SAS has no effect on the direction of Safran SA i.e., Safran SA and IDS France go up and down completely randomly.
Pair Corralation between Safran SA and IDS France
If you would invest 20,780 in Safran SA on September 1, 2024 and sell it today you would earn a total of 1,270 from holding Safran SA or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Safran SA vs. IDS France SAS
Performance |
| Timeline |
| Safran SA |
| IDS France SAS |
Safran SA and IDS France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safran SA and IDS France
The main advantage of trading using opposite Safran SA and IDS France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safran SA position performs unexpectedly, IDS France 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 IDS France will offset losses from the drop in IDS France's long position.| Safran SA vs. Thales SA | Safran SA vs. Vinci SA | Safran SA vs. Air Liquide SA | Safran SA vs. Dassault Systemes SE |
| IDS France vs. Avenir Telecom SA | IDS France vs. ATEME SA | IDS France vs. Lectra SA | IDS France vs. BigBen Interactive |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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