Correlation Between Softimat and Sofina Socit
Can any of the company-specific risk be diversified away by investing in both Softimat and Sofina Socit 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 Softimat and Sofina Socit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Softimat SA and Sofina Socit Anonyme, you can compare the effects of market volatilities on Softimat and Sofina Socit 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 Softimat with a short position of Sofina Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Softimat and Sofina Socit.
Diversification Opportunities for Softimat and Sofina Socit
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Softimat and Sofina is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Softimat SA and Sofina Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofina Socit Anonyme and Softimat 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 Softimat SA are associated (or correlated) with Sofina Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofina Socit Anonyme has no effect on the direction of Softimat i.e., Softimat and Sofina Socit go up and down completely randomly.
Pair Corralation between Softimat and Sofina Socit
Assuming the 90 days trading horizon Softimat SA is expected to under-perform the Sofina Socit. But the stock apears to be less risky and, when comparing its historical volatility, Softimat SA is 1.69 times less risky than Sofina Socit. The stock trades about -0.24 of its potential returns per unit of risk. The Sofina Socit Anonyme is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 24,420 in Sofina Socit Anonyme on November 29, 2024 and sell it today you would lose (300.00) from holding Sofina Socit Anonyme or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Softimat SA vs. Sofina Socit Anonyme
Performance |
| Timeline |
| Softimat SA |
| Sofina Socit Anonyme |
Softimat and Sofina Socit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Softimat and Sofina Socit
The main advantage of trading using opposite Softimat and Sofina Socit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Softimat position performs unexpectedly, Sofina Socit 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 Sofina Socit will offset losses from the drop in Sofina Socit's long position.The idea behind Softimat SA and Sofina Socit Anonyme 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.| Sofina Socit vs. Shurgard Self Storage | Sofina Socit vs. Ion Beam Applications | Sofina Socit vs. Retail Estates | Sofina Socit vs. Home Invest Belgium |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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