Correlation Between Sopra Steria and SQLI SA
Can any of the company-specific risk be diversified away by investing in both Sopra Steria and SQLI 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 Sopra Steria and SQLI SA 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 SQLI SA, you can compare the effects of market volatilities on Sopra Steria and SQLI 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 Sopra Steria with a short position of SQLI SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sopra Steria and SQLI SA.
Diversification Opportunities for Sopra Steria and SQLI SA
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sopra and SQLI is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sopra Steria Group and SQLI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SQLI SA 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 SQLI SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SQLI SA has no effect on the direction of Sopra Steria i.e., Sopra Steria and SQLI SA go up and down completely randomly.
Pair Corralation between Sopra Steria and SQLI SA
Assuming the 90 days trading horizon Sopra Steria Group is expected to generate 3.99 times more return on investment than SQLI SA. However, Sopra Steria is 3.99 times more volatile than SQLI SA. It trades about 0.13 of its potential returns per unit of risk. SQLI SA is currently generating about 0.12 per unit of risk. If you would invest 17,340 in Sopra Steria Group on August 29, 2024 and sell it today you would earn a total of 650.00 from holding Sopra Steria Group or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sopra Steria Group vs. SQLI SA
Performance |
| Timeline |
| Sopra Steria Group |
| SQLI SA |
Sopra Steria and SQLI SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sopra Steria and SQLI SA
The main advantage of trading using opposite Sopra Steria and SQLI SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sopra Steria position performs unexpectedly, SQLI 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 SQLI SA will offset losses from the drop in SQLI SA's long position.| Sopra Steria vs. Alten SA | Sopra Steria vs. Capgemini SE | Sopra Steria vs. Atos SE | Sopra Steria vs. Trigano SA |
| SQLI SA vs. Neurones | SQLI SA vs. Manitou BF SA | SQLI SA vs. Ossiam Minimum Variance | SQLI SA vs. Granite 3x LVMH |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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