Correlation Between Sodexo PK and Elis SA
Can any of the company-specific risk be diversified away by investing in both Sodexo PK and Elis SA 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 Sodexo PK and Elis SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sodexo PK and Elis SA, you can compare the effects of market volatilities on Sodexo PK and Elis SA 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 Sodexo PK with a short position of Elis SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sodexo PK and Elis SA.
Diversification Opportunities for Sodexo PK and Elis SA
Poor diversification
The 3 months correlation between Sodexo and Elis is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sodexo PK and Elis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elis SA and Sodexo PK 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 Sodexo PK are associated (or correlated) with Elis SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elis SA has no effect on the direction of Sodexo PK i.e., Sodexo PK and Elis SA go up and down completely randomly.
Pair Corralation between Sodexo PK and Elis SA
Assuming the 90 days horizon Sodexo PK is expected to generate 0.89 times more return on investment than Elis SA. However, Sodexo PK is 1.13 times less risky than Elis SA. It trades about -0.02 of its potential returns per unit of risk. Elis SA is currently generating about -0.03 per unit of risk. If you would invest 1,635 in Sodexo PK on November 3, 2024 and sell it today you would lose (157.00) from holding Sodexo PK or give up 9.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.46% |
| Values | Daily Returns |
Sodexo PK vs. Elis SA
Performance |
| Timeline |
| Sodexo PK |
| Elis SA |
Sodexo PK and Elis SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sodexo PK and Elis SA
The main advantage of trading using opposite Sodexo PK and Elis SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sodexo PK position performs unexpectedly, Elis SA 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 Elis SA will offset losses from the drop in Elis SA's long position.| Sodexo PK vs. Wialan Technologies | Sodexo PK vs. TPT Global Tech | Sodexo PK vs. AAP Inc | Sodexo PK vs. Impinj Inc |
| Elis SA vs. Maximus | Elis SA vs. Network 1 Technologies | Elis SA vs. First Advantage Corp | Elis SA vs. BrightView Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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