Correlation Between Séché Environnement and Science Applications
Can any of the company-specific risk be diversified away by investing in both Séché Environnement and Science Applications 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 Science Applications 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 Science Applications International, you can compare the effects of market volatilities on Séché Environnement and Science Applications 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 Science Applications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Séché Environnement and Science Applications.
Diversification Opportunities for Séché Environnement and Science Applications
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Séché and Science is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sch Environnement SA and Science Applications Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Applications 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 Science Applications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Applications has no effect on the direction of Séché Environnement i.e., Séché Environnement and Science Applications go up and down completely randomly.
Pair Corralation between Séché Environnement and Science Applications
Assuming the 90 days horizon Sch Environnement SA is expected to under-perform the Science Applications. In addition to that, Séché Environnement is 1.07 times more volatile than Science Applications International. It trades about -0.02 of its total potential returns per unit of risk. Science Applications International is currently generating about 0.03 per unit of volatility. If you would invest 9,683 in Science Applications International on October 16, 2024 and sell it today you would earn a total of 1,717 from holding Science Applications International or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sch Environnement SA vs. Science Applications Internati
Performance |
| Timeline |
| Séché Environnement |
| Science Applications |
Séché Environnement and Science Applications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Séché Environnement and Science Applications
The main advantage of trading using opposite Séché Environnement and Science Applications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Séché Environnement position performs unexpectedly, Science Applications 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 Science Applications will offset losses from the drop in Science Applications' long position.| Séché Environnement vs. GRENKELEASING Dusseldorf | Séché Environnement vs. RCS MediaGroup SpA | Séché Environnement vs. Tyson Foods | Séché Environnement vs. Townsquare Media |
| Science Applications vs. Sch Environnement SA | Science Applications vs. Kingdee International Software | Science Applications vs. Tianjin Capital Environmental | Science Applications vs. ANGANG STEEL H |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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