Correlation Between Séché Environnement and DIeteren Group
Can any of the company-specific risk be diversified away by investing in both Séché Environnement and DIeteren Group 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 DIeteren Group 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 DIeteren Group SA, you can compare the effects of market volatilities on Séché Environnement and DIeteren Group 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 DIeteren Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Séché Environnement and DIeteren Group.
Diversification Opportunities for Séché Environnement and DIeteren Group
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Séché and DIeteren is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sch Environnement SA and DIeteren Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIeteren Group SA 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 DIeteren Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIeteren Group SA has no effect on the direction of Séché Environnement i.e., Séché Environnement and DIeteren Group go up and down completely randomly.
Pair Corralation between Séché Environnement and DIeteren Group
Assuming the 90 days horizon Sch Environnement SA is expected to generate 1.33 times more return on investment than DIeteren Group. However, Séché Environnement is 1.33 times more volatile than DIeteren Group SA. It trades about 0.24 of its potential returns per unit of risk. DIeteren Group SA is currently generating about -0.42 per unit of risk. If you would invest 7,480 in Sch Environnement SA on October 16, 2024 and sell it today you would earn a total of 420.00 from holding Sch Environnement SA or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sch Environnement SA vs. DIeteren Group SA
Performance |
| Timeline |
| Séché Environnement |
| DIeteren Group SA |
Séché Environnement and DIeteren Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Séché Environnement and DIeteren Group
The main advantage of trading using opposite Séché Environnement and DIeteren Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Séché Environnement position performs unexpectedly, DIeteren Group 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 DIeteren Group will offset losses from the drop in DIeteren Group's long position.| Séché Environnement vs. GRENKELEASING Dusseldorf | Séché Environnement vs. RCS MediaGroup SpA | Séché Environnement vs. Tyson Foods | Séché Environnement vs. Townsquare Media |
| DIeteren Group vs. Apollo Investment Corp | DIeteren Group vs. Sch Environnement SA | DIeteren Group vs. DONGJIANG ENVIRONMENTAL H | DIeteren Group vs. Chuangs China Investments |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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