Correlation Between Sofina Socit and DEME Group
Can any of the company-specific risk be diversified away by investing in both Sofina Socit and DEME 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 Sofina Socit and DEME Group 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 DEME Group NV, you can compare the effects of market volatilities on Sofina Socit and DEME 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 Sofina Socit with a short position of DEME Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofina Socit and DEME Group.
Diversification Opportunities for Sofina Socit and DEME Group
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sofina and DEME is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme and DEME Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEME Group NV 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 DEME Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEME Group NV has no effect on the direction of Sofina Socit i.e., Sofina Socit and DEME Group go up and down completely randomly.
Pair Corralation between Sofina Socit and DEME Group
Assuming the 90 days trading horizon Sofina Socit is expected to generate 2.02 times less return on investment than DEME Group. In addition to that, Sofina Socit is 1.12 times more volatile than DEME Group NV. It trades about 0.02 of its total potential returns per unit of risk. DEME Group NV is currently generating about 0.04 per unit of volatility. If you would invest 11,737 in DEME Group NV on August 28, 2024 and sell it today you would earn a total of 3,163 from holding DEME Group NV or generate 26.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sofina Socit Anonyme vs. DEME Group NV
Performance |
| Timeline |
| Sofina Socit Anonyme |
| DEME Group NV |
Sofina Socit and DEME Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofina Socit and DEME Group
The main advantage of trading using opposite Sofina Socit and DEME Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofina Socit position performs unexpectedly, DEME 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 DEME Group will offset losses from the drop in DEME Group's long position.| Sofina Socit vs. Retail Estates | Sofina Socit vs. Home Invest Belgium | Sofina Socit vs. Shurgard Self Storage | Sofina Socit vs. Vastned Retail Belgium |
| DEME Group vs. Compagnie d Entreprises | DEME Group vs. DIeteren Group SA | DEME Group vs. Ackermans Van Haaren | DEME Group vs. Sofina Socit Anonyme |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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