Correlation Between Socit Gnrale and Komercn Banka
Can any of the company-specific risk be diversified away by investing in both Socit Gnrale and Komercn Banka 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 Socit Gnrale and Komercn Banka into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Socit Gnrale Socit and Komercn banka as, you can compare the effects of market volatilities on Socit Gnrale and Komercn Banka 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 Socit Gnrale with a short position of Komercn Banka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Socit Gnrale and Komercn Banka.
Diversification Opportunities for Socit Gnrale and Komercn Banka
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Socit and Komercn is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Socit Gnrale Socit and Komercn banka as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komercn banka as and Socit Gnrale 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 Socit Gnrale Socit are associated (or correlated) with Komercn Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komercn banka as has no effect on the direction of Socit Gnrale i.e., Socit Gnrale and Komercn Banka go up and down completely randomly.
Pair Corralation between Socit Gnrale and Komercn Banka
Assuming the 90 days trading horizon Socit Gnrale Socit is expected to generate 2.42 times more return on investment than Komercn Banka. However, Socit Gnrale is 2.42 times more volatile than Komercn banka as. It trades about 0.06 of its potential returns per unit of risk. Komercn banka as is currently generating about 0.01 per unit of risk. If you would invest 2,384 in Socit Gnrale Socit on August 29, 2024 and sell it today you would earn a total of 71.00 from holding Socit Gnrale Socit or generate 2.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Socit Gnrale Socit vs. Komercn banka as
Performance |
| Timeline |
| Socit Gnrale Socit |
| Komercn banka as |
Socit Gnrale and Komercn Banka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Socit Gnrale and Komercn Banka
The main advantage of trading using opposite Socit Gnrale and Komercn Banka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Socit Gnrale position performs unexpectedly, Komercn Banka 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 Komercn Banka will offset losses from the drop in Komercn Banka's long position.The idea behind Socit Gnrale Socit and Komercn banka as 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.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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