Correlation Between Sofina Socit and Floridienne
Can any of the company-specific risk be diversified away by investing in both Sofina Socit and Floridienne 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 Floridienne 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 Floridienne, you can compare the effects of market volatilities on Sofina Socit and Floridienne 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 Floridienne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofina Socit and Floridienne.
Diversification Opportunities for Sofina Socit and Floridienne
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sofina and Floridienne is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme and Floridienne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floridienne 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 Floridienne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floridienne has no effect on the direction of Sofina Socit i.e., Sofina Socit and Floridienne go up and down completely randomly.
Pair Corralation between Sofina Socit and Floridienne
Assuming the 90 days trading horizon Sofina Socit Anonyme is expected to generate 1.07 times more return on investment than Floridienne. However, Sofina Socit is 1.07 times more volatile than Floridienne. It trades about 0.01 of its potential returns per unit of risk. Floridienne is currently generating about -0.05 per unit of risk. If you would invest 21,840 in Sofina Socit Anonyme on August 31, 2024 and sell it today you would lose (60.00) from holding Sofina Socit Anonyme or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sofina Socit Anonyme vs. Floridienne
Performance |
| Timeline |
| Sofina Socit Anonyme |
| Floridienne |
Sofina Socit and Floridienne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofina Socit and Floridienne
The main advantage of trading using opposite Sofina Socit and Floridienne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofina Socit position performs unexpectedly, Floridienne 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 Floridienne will offset losses from the drop in Floridienne's long position.| Sofina Socit vs. Ion Beam Applications | Sofina Socit vs. Keyware Technologies NV | Sofina Socit vs. Shurgard Self Storage | Sofina Socit vs. Home Invest Belgium |
| Floridienne vs. Brederode SA | Floridienne vs. Compagnie du Bois | Floridienne vs. Ackermans Van Haaren | Floridienne 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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