Correlation Between Sopra Steria and Energisme
Can any of the company-specific risk be diversified away by investing in both Sopra Steria and Energisme 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 Sopra Steria and Energisme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sopra Steria Group and Energisme, you can compare the effects of market volatilities on Sopra Steria and Energisme 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 Sopra Steria with a short position of Energisme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sopra Steria and Energisme.
Diversification Opportunities for Sopra Steria and Energisme
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sopra and Energisme is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sopra Steria Group and Energisme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisme and Sopra Steria 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 Sopra Steria Group are associated (or correlated) with Energisme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energisme has no effect on the direction of Sopra Steria i.e., Sopra Steria and Energisme go up and down completely randomly.
Pair Corralation between Sopra Steria and Energisme
Assuming the 90 days trading horizon Sopra Steria Group is expected to under-perform the Energisme. But the stock apears to be less risky and, when comparing its historical volatility, Sopra Steria Group is 1.92 times less risky than Energisme. The stock trades about -0.06 of its potential returns per unit of risk. The Energisme is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 0.66 in Energisme on September 1, 2024 and sell it today you would lose (0.11) from holding Energisme or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sopra Steria Group vs. Energisme
Performance |
| Timeline |
| Sopra Steria Group |
| Energisme |
Sopra Steria and Energisme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sopra Steria and Energisme
The main advantage of trading using opposite Sopra Steria and Energisme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sopra Steria position performs unexpectedly, Energisme 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 Energisme will offset losses from the drop in Energisme's long position.| Sopra Steria vs. Neurones | Sopra Steria vs. Infotel SA | Sopra Steria vs. Alten SA | Sopra Steria vs. Manitou BF SA |
| Energisme vs. Kerlink SAS | Energisme vs. Nacon Sa | Energisme vs. Agripower France Sa | Energisme vs. Hydrogen Refueling Solutions |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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