Correlation Between Smcp SAS and Solocal Group
Can any of the company-specific risk be diversified away by investing in both Smcp SAS and Solocal 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 Smcp SAS and Solocal Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smcp SAS and Solocal Group SA, you can compare the effects of market volatilities on Smcp SAS and Solocal 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 Smcp SAS with a short position of Solocal Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smcp SAS and Solocal Group.
Diversification Opportunities for Smcp SAS and Solocal Group
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Smcp and Solocal is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Smcp SAS and Solocal Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solocal Group SA and Smcp SAS 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 Smcp SAS are associated (or correlated) with Solocal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solocal Group SA has no effect on the direction of Smcp SAS i.e., Smcp SAS and Solocal Group go up and down completely randomly.
Pair Corralation between Smcp SAS and Solocal Group
Assuming the 90 days trading horizon Smcp SAS is expected to generate 0.84 times more return on investment than Solocal Group. However, Smcp SAS is 1.19 times less risky than Solocal Group. It trades about 0.26 of its potential returns per unit of risk. Solocal Group SA is currently generating about 0.2 per unit of risk. If you would invest 240.00 in Smcp SAS on August 29, 2024 and sell it today you would earn a total of 53.00 from holding Smcp SAS or generate 22.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smcp SAS vs. Solocal Group SA
Performance |
| Timeline |
| Smcp SAS |
| Solocal Group SA |
Smcp SAS and Solocal Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smcp SAS and Solocal Group
The main advantage of trading using opposite Smcp SAS and Solocal Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smcp SAS position performs unexpectedly, Solocal 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 Solocal Group will offset losses from the drop in Solocal Group's long position.| Smcp SAS vs. Maisons du Monde | Smcp SAS vs. Fnac Darty SA | Smcp SAS vs. Mersen SA | Smcp SAS vs. Interparfums SA |
| Solocal Group vs. Manitou BF SA | Solocal Group vs. Ossiam Minimum Variance | Solocal Group vs. Ekinops SA | Solocal Group vs. Orapi SA |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |