Correlation Between Séché Environnement and SHIP HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Séché Environnement and SHIP HEALTHCARE 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 Séché Environnement and SHIP HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sch Environnement SA and SHIP HEALTHCARE HLDGINC, you can compare the effects of market volatilities on Séché Environnement and SHIP HEALTHCARE 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 Séché Environnement with a short position of SHIP HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Séché Environnement and SHIP HEALTHCARE.
Diversification Opportunities for Séché Environnement and SHIP HEALTHCARE
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Séché and SHIP is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sch Environnement SA and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC and Séché Environnement 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 Sch Environnement SA are associated (or correlated) with SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of Séché Environnement i.e., Séché Environnement and SHIP HEALTHCARE go up and down completely randomly.
Pair Corralation between Séché Environnement and SHIP HEALTHCARE
Assuming the 90 days horizon Sch Environnement SA is expected to under-perform the SHIP HEALTHCARE. But the stock apears to be less risky and, when comparing its historical volatility, Sch Environnement SA is 1.63 times less risky than SHIP HEALTHCARE. The stock trades about -0.03 of its potential returns per unit of risk. The SHIP HEALTHCARE HLDGINC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 936.00 in SHIP HEALTHCARE HLDGINC on October 16, 2024 and sell it today you would earn a total of 374.00 from holding SHIP HEALTHCARE HLDGINC or generate 39.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sch Environnement SA vs. SHIP HEALTHCARE HLDGINC
Performance |
| Timeline |
| Séché Environnement |
| SHIP HEALTHCARE HLDGINC |
Séché Environnement and SHIP HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Séché Environnement and SHIP HEALTHCARE
The main advantage of trading using opposite Séché Environnement and SHIP HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Séché Environnement position performs unexpectedly, SHIP HEALTHCARE 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 SHIP HEALTHCARE will offset losses from the drop in SHIP HEALTHCARE's long position.| Séché Environnement vs. GRENKELEASING Dusseldorf | Séché Environnement vs. RCS MediaGroup SpA | Séché Environnement vs. Tyson Foods | Séché Environnement vs. Townsquare Media |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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