Correlation Between Sodexo SA and Making Science
Can any of the company-specific risk be diversified away by investing in both Sodexo SA and Making Science 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 Making Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sodexo SA and Making Science Group, you can compare the effects of market volatilities on Sodexo SA and Making Science 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 Making Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sodexo SA and Making Science.
Diversification Opportunities for Sodexo SA and Making Science
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sodexo and Making is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sodexo SA and Making Science Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Making Science Group 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 Making Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Making Science Group has no effect on the direction of Sodexo SA i.e., Sodexo SA and Making Science go up and down completely randomly.
Pair Corralation between Sodexo SA and Making Science
Assuming the 90 days horizon Sodexo SA is expected to generate 0.83 times more return on investment than Making Science. However, Sodexo SA is 1.2 times less risky than Making Science. It trades about 0.05 of its potential returns per unit of risk. Making Science Group is currently generating about -0.04 per unit of risk. If you would invest 5,975 in Sodexo SA on September 4, 2024 and sell it today you would earn a total of 1,725 from holding Sodexo SA or generate 28.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sodexo SA vs. Making Science Group
Performance |
| Timeline |
| Sodexo SA |
| Making Science Group |
Sodexo SA and Making Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sodexo SA and Making Science
The main advantage of trading using opposite Sodexo SA and Making Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sodexo SA position performs unexpectedly, Making Science 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 Making Science will offset losses from the drop in Making Science'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 |
| Making Science vs. Mediantechn | Making Science vs. Veolia Environnement VE | Making Science vs. Axway Software | Making Science vs. X Fab Silicon |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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