Correlation Between Soitec SA and Stef SA
Can any of the company-specific risk be diversified away by investing in both Soitec SA and Stef SA 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 Soitec SA and Stef SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soitec SA and Stef SA, you can compare the effects of market volatilities on Soitec SA and Stef SA 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 Soitec SA with a short position of Stef SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soitec SA and Stef SA.
Diversification Opportunities for Soitec SA and Stef SA
Very good diversification
The 3 months correlation between Soitec and Stef is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Soitec SA and Stef SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stef SA and Soitec SA 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 Soitec SA are associated (or correlated) with Stef SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stef SA has no effect on the direction of Soitec SA i.e., Soitec SA and Stef SA go up and down completely randomly.
Pair Corralation between Soitec SA and Stef SA
Assuming the 90 days trading horizon Soitec SA is expected to generate 4.23 times less return on investment than Stef SA. In addition to that, Soitec SA is 2.26 times more volatile than Stef SA. It trades about 0.02 of its total potential returns per unit of risk. Stef SA is currently generating about 0.2 per unit of volatility. If you would invest 13,020 in Stef SA on October 25, 2024 and sell it today you would earn a total of 620.00 from holding Stef SA or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soitec SA vs. Stef SA
Performance |
| Timeline |
| Soitec SA |
| Stef SA |
Soitec SA and Stef SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soitec SA and Stef SA
The main advantage of trading using opposite Soitec SA and Stef SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soitec SA position performs unexpectedly, Stef SA 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 Stef SA will offset losses from the drop in Stef SA's long position.| Soitec SA vs. Vallourec | Soitec SA vs. Dassault Systemes SE | Soitec SA vs. Teleperformance SE | Soitec SA vs. Atos SE |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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