Correlation Between Sodexo SA and Worldline
Can any of the company-specific risk be diversified away by investing in both Sodexo SA and Worldline 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 Worldline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sodexo SA and Worldline SA, you can compare the effects of market volatilities on Sodexo SA and Worldline 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 Worldline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sodexo SA and Worldline.
Diversification Opportunities for Sodexo SA and Worldline
Very good diversification
The 3 months correlation between Sodexo and Worldline is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sodexo SA and Worldline SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldline SA 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 Worldline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldline SA has no effect on the direction of Sodexo SA i.e., Sodexo SA and Worldline go up and down completely randomly.
Pair Corralation between Sodexo SA and Worldline
Assuming the 90 days horizon Sodexo SA is expected to under-perform the Worldline. But the stock apears to be less risky and, when comparing its historical volatility, Sodexo SA is 2.73 times less risky than Worldline. The stock trades about -0.04 of its potential returns per unit of risk. The Worldline SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 791.00 in Worldline SA on November 3, 2024 and sell it today you would earn a total of 61.00 from holding Worldline SA or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sodexo SA vs. Worldline SA
Performance |
| Timeline |
| Sodexo SA |
| Worldline SA |
Sodexo SA and Worldline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sodexo SA and Worldline
The main advantage of trading using opposite Sodexo SA and Worldline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sodexo SA position performs unexpectedly, Worldline 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 Worldline will offset losses from the drop in Worldline'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 |
| Worldline vs. Atos SE | Worldline vs. Teleperformance SE | Worldline vs. Dassault Systemes SE | Worldline vs. Capgemini SE |
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 Stocks Directory module to find actively traded stocks across global markets.
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