Correlation Between Solvay SA and Etex SA
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By analyzing existing cross correlation between Solvay SA and Etex SA, you can compare the effects of market volatilities on Solvay SA and Etex 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 Solvay SA with a short position of Etex SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solvay SA and Etex SA.
Diversification Opportunities for Solvay SA and Etex SA
Very good diversification
The 3 months correlation between Solvay and Etex is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Solvay SA and Etex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etex SA and Solvay 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 Solvay SA are associated (or correlated) with Etex SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etex SA has no effect on the direction of Solvay SA i.e., Solvay SA and Etex SA go up and down completely randomly.
Pair Corralation between Solvay SA and Etex SA
Assuming the 90 days trading horizon Solvay SA is expected to generate 1.81 times more return on investment than Etex SA. However, Solvay SA is 1.81 times more volatile than Etex SA. It trades about -0.22 of its potential returns per unit of risk. Etex SA is currently generating about -0.67 per unit of risk. If you would invest 3,724 in Solvay SA on September 2, 2024 and sell it today you would lose (453.00) from holding Solvay SA or give up 12.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.73% |
| Values | Daily Returns |
Solvay SA vs. Etex SA
Performance |
| Timeline |
| Solvay SA |
| Etex SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Solvay SA and Etex SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solvay SA and Etex SA
The main advantage of trading using opposite Solvay SA and Etex SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solvay SA position performs unexpectedly, Etex 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 Etex SA will offset losses from the drop in Etex SA's long position.| Solvay SA vs. Keyware Technologies NV | Solvay SA vs. Shurgard Self Storage | Solvay SA vs. Onward Medical NV | Solvay SA vs. Ion Beam Applications |
| Etex SA vs. Vastned Retail Belgium | Etex SA vs. Shurgard Self Storage | Etex SA vs. Keyware Technologies NV | Etex SA vs. Ion Beam Applications |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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