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
Significant diversification
The 3 months correlation between Sodexo and Worldline is 0.09. 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 generate 0.26 times more return on investment than Worldline. However, Sodexo SA is 3.92 times less risky than Worldline. It trades about 0.06 of its potential returns per unit of risk. Worldline SA is currently generating about -0.05 per unit of risk. If you would invest 6,431 in Sodexo SA on September 12, 2024 and sell it today you would earn a total of 1,569 from holding Sodexo SA or generate 24.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| 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. Worldline SA | Sodexo SA vs. Eurofins Scientific SE | Sodexo SA vs. Sartorius Stedim Biotech | Sodexo SA vs. Dassault Systemes SE |
| Worldline vs. Groupe Guillin SA | Worldline vs. Stef SA | Worldline vs. SA Catana Group | Worldline vs. Jacquet Metal Service |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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