Correlation Between Sodexo SA and Enertime SAS
Can any of the company-specific risk be diversified away by investing in both Sodexo SA and Enertime SAS 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 Sodexo SA and Enertime SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sodexo SA and Enertime SAS, you can compare the effects of market volatilities on Sodexo SA and Enertime SAS 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 Sodexo SA with a short position of Enertime SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sodexo SA and Enertime SAS.
Diversification Opportunities for Sodexo SA and Enertime SAS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sodexo and Enertime is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sodexo SA and Enertime SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enertime SAS and Sodexo 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 Sodexo SA are associated (or correlated) with Enertime SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enertime SAS has no effect on the direction of Sodexo SA i.e., Sodexo SA and Enertime SAS go up and down completely randomly.
Pair Corralation between Sodexo SA and Enertime SAS
Assuming the 90 days horizon Sodexo SA is expected to generate 0.49 times more return on investment than Enertime SAS. However, Sodexo SA is 2.03 times less risky than Enertime SAS. It trades about -0.03 of its potential returns per unit of risk. Enertime SAS is currently generating about -0.12 per unit of risk. If you would invest 8,287 in Sodexo SA on September 3, 2024 and sell it today you would lose (587.00) from holding Sodexo SA or give up 7.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.35% |
| Values | Daily Returns |
Sodexo SA vs. Enertime SAS
Performance |
| Timeline |
| Sodexo SA |
| Enertime SAS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sodexo SA and Enertime SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sodexo SA and Enertime SAS
The main advantage of trading using opposite Sodexo SA and Enertime SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sodexo SA position performs unexpectedly, Enertime SAS 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 Enertime SAS will offset losses from the drop in Enertime SAS's long position.| Sodexo SA vs. Accor S A | Sodexo SA vs. Publicis Groupe SA | Sodexo SA vs. Legrand SA | Sodexo SA vs. Pernod Ricard SA |
| Enertime SAS vs. Derichebourg | Enertime SAS vs. Mersen SA | Enertime SAS vs. Trigano SA | Enertime SAS vs. Chargeurs 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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