Correlation Between Sanofi SA and Rubis SCA
Can any of the company-specific risk be diversified away by investing in both Sanofi SA and Rubis SCA 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 Rubis SCA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanofi SA and Rubis SCA, you can compare the effects of market volatilities on Sanofi SA and Rubis SCA 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 Rubis SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanofi SA and Rubis SCA.
Diversification Opportunities for Sanofi SA and Rubis SCA
Very weak diversification
The 3 months correlation between Sanofi and Rubis is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sanofi SA and Rubis SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubis SCA 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 Rubis SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubis SCA has no effect on the direction of Sanofi SA i.e., Sanofi SA and Rubis SCA go up and down completely randomly.
Pair Corralation between Sanofi SA and Rubis SCA
Assuming the 90 days trading horizon Sanofi SA is expected to under-perform the Rubis SCA. But the stock apears to be less risky and, when comparing its historical volatility, Sanofi SA is 2.52 times less risky than Rubis SCA. The stock trades about -0.3 of its potential returns per unit of risk. The Rubis SCA is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 2,428 in Rubis SCA on August 30, 2024 and sell it today you would lose (178.00) from holding Rubis SCA or give up 7.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sanofi SA vs. Rubis SCA
Performance |
| Timeline |
| Sanofi SA |
| Rubis SCA |
Sanofi SA and Rubis SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanofi SA and Rubis SCA
The main advantage of trading using opposite Sanofi SA and Rubis SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanofi SA position performs unexpectedly, Rubis SCA 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 Rubis SCA will offset losses from the drop in Rubis SCA's long position.The idea behind Sanofi SA and Rubis SCA 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.| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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