Correlation Between Sopra Steria and Neurones
Can any of the company-specific risk be diversified away by investing in both Sopra Steria and Neurones 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 Neurones 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 Neurones, you can compare the effects of market volatilities on Sopra Steria and Neurones 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 Neurones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sopra Steria and Neurones.
Diversification Opportunities for Sopra Steria and Neurones
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sopra and Neurones is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sopra Steria Group and Neurones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neurones 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 Neurones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neurones has no effect on the direction of Sopra Steria i.e., Sopra Steria and Neurones go up and down completely randomly.
Pair Corralation between Sopra Steria and Neurones
Assuming the 90 days trading horizon Sopra Steria Group is expected to under-perform the Neurones. In addition to that, Sopra Steria is 1.42 times more volatile than Neurones. It trades about 0.0 of its total potential returns per unit of risk. Neurones is currently generating about 0.06 per unit of volatility. If you would invest 3,796 in Neurones on August 25, 2024 and sell it today you would earn a total of 744.00 from holding Neurones or generate 19.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sopra Steria Group vs. Neurones
Performance |
| Timeline |
| Sopra Steria Group |
| Neurones |
Sopra Steria and Neurones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sopra Steria and Neurones
The main advantage of trading using opposite Sopra Steria and Neurones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sopra Steria position performs unexpectedly, Neurones 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 Neurones will offset losses from the drop in Neurones' long position.| Sopra Steria vs. Neurones | Sopra Steria vs. Infotel SA | Sopra Steria vs. Alten SA | Sopra Steria vs. Manitou BF SA |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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