Correlation Between Sanofi SA and Malteries Franco
Can any of the company-specific risk be diversified away by investing in both Sanofi SA and Malteries Franco 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 Sanofi SA and Malteries Franco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanofi SA and Malteries Franco Belges Socit, you can compare the effects of market volatilities on Sanofi SA and Malteries Franco 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 Sanofi SA with a short position of Malteries Franco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanofi SA and Malteries Franco.
Diversification Opportunities for Sanofi SA and Malteries Franco
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sanofi and Malteries is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sanofi SA and Malteries Franco Belges Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malteries Franco Belges and Sanofi 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 Sanofi SA are associated (or correlated) with Malteries Franco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malteries Franco Belges has no effect on the direction of Sanofi SA i.e., Sanofi SA and Malteries Franco go up and down completely randomly.
Pair Corralation between Sanofi SA and Malteries Franco
Assuming the 90 days trading horizon Sanofi SA is expected to under-perform the Malteries Franco. In addition to that, Sanofi SA is 1.02 times more volatile than Malteries Franco Belges Socit. It trades about -0.21 of its total potential returns per unit of risk. Malteries Franco Belges Socit is currently generating about 0.23 per unit of volatility. If you would invest 64,500 in Malteries Franco Belges Socit on August 30, 2024 and sell it today you would earn a total of 7,500 from holding Malteries Franco Belges Socit or generate 11.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanofi SA vs. Malteries Franco Belges Socit
Performance |
| Timeline |
| Sanofi SA |
| Malteries Franco Belges |
Sanofi SA and Malteries Franco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanofi SA and Malteries Franco
The main advantage of trading using opposite Sanofi SA and Malteries Franco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanofi SA position performs unexpectedly, Malteries Franco 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 Malteries Franco will offset losses from the drop in Malteries Franco's long position.The idea behind Sanofi SA and Malteries Franco Belges Socit 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.| Malteries Franco vs. Grard Perrier Industrie | Malteries Franco vs. Robertet SA | Malteries Franco vs. Thermador Groupe SA | Malteries Franco vs. Piscines Desjoyaux 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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