Correlation Between Sword Group and Stef SA
Can any of the company-specific risk be diversified away by investing in both Sword Group and Stef SA 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 Sword Group and Stef SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sword Group SE and Stef SA, you can compare the effects of market volatilities on Sword Group and Stef SA 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 Sword Group with a short position of Stef SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sword Group and Stef SA.
Diversification Opportunities for Sword Group and Stef SA
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sword and Stef is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sword Group SE and Stef SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stef SA and Sword Group 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 Sword Group SE are associated (or correlated) with Stef SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stef SA has no effect on the direction of Sword Group i.e., Sword Group and Stef SA go up and down completely randomly.
Pair Corralation between Sword Group and Stef SA
Assuming the 90 days trading horizon Sword Group SE is expected to under-perform the Stef SA. In addition to that, Sword Group is 1.15 times more volatile than Stef SA. It trades about -0.01 of its total potential returns per unit of risk. Stef SA is currently generating about 0.05 per unit of volatility. If you would invest 10,002 in Stef SA on September 1, 2024 and sell it today you would earn a total of 2,998 from holding Stef SA or generate 29.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Sword Group SE vs. Stef SA
Performance |
| Timeline |
| Sword Group SE |
| Stef SA |
Sword Group and Stef SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sword Group and Stef SA
The main advantage of trading using opposite Sword Group and Stef SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sword Group position performs unexpectedly, Stef SA 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 Stef SA will offset losses from the drop in Stef SA's long position.| Sword Group vs. Aubay Socit Anonyme | Sword Group vs. Neurones | Sword Group vs. Rubis SCA | Sword Group vs. Linedata Services 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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