Correlation Between Stef SA and Saint Jean
Can any of the company-specific risk be diversified away by investing in both Stef SA and Saint Jean 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 Stef SA and Saint Jean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stef SA and Saint Jean Groupe, you can compare the effects of market volatilities on Stef SA and Saint Jean 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 Stef SA with a short position of Saint Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stef SA and Saint Jean.
Diversification Opportunities for Stef SA and Saint Jean
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stef and Saint is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Stef SA and Saint Jean Groupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saint Jean Groupe and Stef 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 Stef SA are associated (or correlated) with Saint Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saint Jean Groupe has no effect on the direction of Stef SA i.e., Stef SA and Saint Jean go up and down completely randomly.
Pair Corralation between Stef SA and Saint Jean
Assuming the 90 days trading horizon Stef SA is expected to generate 0.8 times more return on investment than Saint Jean. However, Stef SA is 1.25 times less risky than Saint Jean. It trades about 0.07 of its potential returns per unit of risk. Saint Jean Groupe is currently generating about 0.0 per unit of risk. If you would invest 10,016 in Stef SA on September 14, 2024 and sell it today you would earn a total of 3,064 from holding Stef SA or generate 30.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Stef SA vs. Saint Jean Groupe
Performance |
| Timeline |
| Stef SA |
| Saint Jean Groupe |
Stef SA and Saint Jean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stef SA and Saint Jean
The main advantage of trading using opposite Stef SA and Saint Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stef SA position performs unexpectedly, Saint Jean 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 Saint Jean will offset losses from the drop in Saint Jean's long position.The idea behind Stef SA and Saint Jean Groupe pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Saint Jean vs. Stef SA | Saint Jean vs. Bonduelle SCA | Saint Jean vs. VIEL Cie socit | Saint Jean vs. Groupe Guillin 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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