Correlation Between SANOFI S and Fineotex Chemical
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By analyzing existing cross correlation between SANOFI S HEALTHC and Fineotex Chemical Limited, you can compare the effects of market volatilities on SANOFI S and Fineotex Chemical 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 S with a short position of Fineotex Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOFI S and Fineotex Chemical.
Diversification Opportunities for SANOFI S and Fineotex Chemical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SANOFI and Fineotex is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SANOFI S HEALTHC and Fineotex Chemical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fineotex Chemical and SANOFI S 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 S HEALTHC are associated (or correlated) with Fineotex Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fineotex Chemical has no effect on the direction of SANOFI S i.e., SANOFI S and Fineotex Chemical go up and down completely randomly.
Pair Corralation between SANOFI S and Fineotex Chemical
Assuming the 90 days trading horizon SANOFI S HEALTHC is expected to generate 0.21 times more return on investment than Fineotex Chemical. However, SANOFI S HEALTHC is 4.84 times less risky than Fineotex Chemical. It trades about -0.16 of its potential returns per unit of risk. Fineotex Chemical Limited is currently generating about -0.11 per unit of risk. If you would invest 488,685 in SANOFI S HEALTHC on September 13, 2024 and sell it today you would lose (6,945) from holding SANOFI S HEALTHC or give up 1.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANOFI S HEALTHC vs. Fineotex Chemical Limited
Performance |
| Timeline |
| SANOFI S HEALTHC |
| Fineotex Chemical |
SANOFI S and Fineotex Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANOFI S and Fineotex Chemical
The main advantage of trading using opposite SANOFI S and Fineotex Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOFI S position performs unexpectedly, Fineotex Chemical 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 Fineotex Chemical will offset losses from the drop in Fineotex Chemical's long position.The idea behind SANOFI S HEALTHC and Fineotex Chemical Limited 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.| Fineotex Chemical vs. Lotus Eye Hospital | Fineotex Chemical vs. Aster DM Healthcare | Fineotex Chemical vs. Sakar Healthcare Limited | Fineotex Chemical vs. SANOFI S HEALTHC |
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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