Correlation Between Sofina Socit and Cenergy Holdings
Can any of the company-specific risk be diversified away by investing in both Sofina Socit and Cenergy Holdings 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 Sofina Socit and Cenergy Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sofina Socit Anonyme and Cenergy Holdings SA, you can compare the effects of market volatilities on Sofina Socit and Cenergy Holdings 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 Sofina Socit with a short position of Cenergy Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofina Socit and Cenergy Holdings.
Diversification Opportunities for Sofina Socit and Cenergy Holdings
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sofina and Cenergy is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme and Cenergy Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenergy Holdings and Sofina Socit 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 Sofina Socit Anonyme are associated (or correlated) with Cenergy Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenergy Holdings has no effect on the direction of Sofina Socit i.e., Sofina Socit and Cenergy Holdings go up and down completely randomly.
Pair Corralation between Sofina Socit and Cenergy Holdings
Assuming the 90 days trading horizon Sofina Socit Anonyme is expected to under-perform the Cenergy Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Sofina Socit Anonyme is 1.76 times less risky than Cenergy Holdings. The stock trades about -0.09 of its potential returns per unit of risk. The Cenergy Holdings SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 875.00 in Cenergy Holdings SA on September 13, 2024 and sell it today you would earn a total of 41.00 from holding Cenergy Holdings SA or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sofina Socit Anonyme vs. Cenergy Holdings SA
Performance |
| Timeline |
| Sofina Socit Anonyme |
| Cenergy Holdings |
Sofina Socit and Cenergy Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofina Socit and Cenergy Holdings
The main advantage of trading using opposite Sofina Socit and Cenergy Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofina Socit position performs unexpectedly, Cenergy Holdings 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 Cenergy Holdings will offset losses from the drop in Cenergy Holdings' long position.| Sofina Socit vs. Vastned Retail Belgium | Sofina Socit vs. Ion Beam Applications | Sofina Socit vs. Keyware Technologies NV | Sofina Socit vs. Immolease Trust NV |
| Cenergy Holdings vs. Viohalco SA | Cenergy Holdings vs. Jensen Group | Cenergy Holdings vs. Floridienne | Cenergy Holdings vs. Compagnie du Bois |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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