Correlation Between Groupe Sfpi and Reworld Media
Can any of the company-specific risk be diversified away by investing in both Groupe Sfpi and Reworld Media 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 Groupe Sfpi and Reworld Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupe Sfpi and Reworld Media, you can compare the effects of market volatilities on Groupe Sfpi and Reworld Media 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 Groupe Sfpi with a short position of Reworld Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe Sfpi and Reworld Media.
Diversification Opportunities for Groupe Sfpi and Reworld Media
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Groupe and Reworld is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Sfpi and Reworld Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reworld Media and Groupe Sfpi 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 Groupe Sfpi are associated (or correlated) with Reworld Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reworld Media has no effect on the direction of Groupe Sfpi i.e., Groupe Sfpi and Reworld Media go up and down completely randomly.
Pair Corralation between Groupe Sfpi and Reworld Media
Assuming the 90 days trading horizon Groupe Sfpi is expected to generate 0.55 times more return on investment than Reworld Media. However, Groupe Sfpi is 1.82 times less risky than Reworld Media. It trades about 0.02 of its potential returns per unit of risk. Reworld Media is currently generating about -0.1 per unit of risk. If you would invest 179.00 in Groupe Sfpi on November 3, 2024 and sell it today you would earn a total of 13.00 from holding Groupe Sfpi or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groupe Sfpi vs. Reworld Media
Performance |
| Timeline |
| Groupe Sfpi |
| Reworld Media |
Groupe Sfpi and Reworld Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe Sfpi and Reworld Media
The main advantage of trading using opposite Groupe Sfpi and Reworld Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe Sfpi position performs unexpectedly, Reworld Media 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 Reworld Media will offset losses from the drop in Reworld Media's long position.| Groupe Sfpi vs. Groupe Guillin SA | Groupe Sfpi vs. Stef SA | Groupe Sfpi vs. SA Catana Group | Groupe Sfpi vs. Jacquet Metal Service |
| Reworld Media vs. Sartorius Stedim Biotech | Reworld Media vs. Impulse Fitness Solutions | Reworld Media vs. Exail Technologies SA | Reworld Media vs. Parx Plastics NV |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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