Correlation Between Soditech and Groupe Pizzorno
Can any of the company-specific risk be diversified away by investing in both Soditech and Groupe Pizzorno 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 Soditech and Groupe Pizzorno into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soditech SA and Groupe Pizzorno Environnement, you can compare the effects of market volatilities on Soditech and Groupe Pizzorno 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 Soditech with a short position of Groupe Pizzorno. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soditech and Groupe Pizzorno.
Diversification Opportunities for Soditech and Groupe Pizzorno
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Soditech and Groupe is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Soditech SA and Groupe Pizzorno Environnement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Pizzorno Envi and Soditech 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 Soditech SA are associated (or correlated) with Groupe Pizzorno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Pizzorno Envi has no effect on the direction of Soditech i.e., Soditech and Groupe Pizzorno go up and down completely randomly.
Pair Corralation between Soditech and Groupe Pizzorno
Assuming the 90 days trading horizon Soditech SA is expected to under-perform the Groupe Pizzorno. But the stock apears to be less risky and, when comparing its historical volatility, Soditech SA is 3.26 times less risky than Groupe Pizzorno. The stock trades about -0.29 of its potential returns per unit of risk. The Groupe Pizzorno Environnement is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 8,180 in Groupe Pizzorno Environnement on August 30, 2024 and sell it today you would lose (140.00) from holding Groupe Pizzorno Environnement or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soditech SA vs. Groupe Pizzorno Environnement
Performance |
| Timeline |
| Soditech SA |
| Groupe Pizzorno Envi |
Soditech and Groupe Pizzorno Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soditech and Groupe Pizzorno
The main advantage of trading using opposite Soditech and Groupe Pizzorno positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soditech position performs unexpectedly, Groupe Pizzorno 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 Groupe Pizzorno will offset losses from the drop in Groupe Pizzorno's long position.The idea behind Soditech SA and Groupe Pizzorno Environnement 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.| Groupe Pizzorno vs. Derichebourg | Groupe Pizzorno vs. High Co SA | Groupe Pizzorno vs. Jacquet Metal Service |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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