Correlation Between Transgene and Cegedim SA
Can any of the company-specific risk be diversified away by investing in both Transgene and Cegedim 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 Transgene and Cegedim SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transgene SA and Cegedim SA, you can compare the effects of market volatilities on Transgene and Cegedim 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 Transgene with a short position of Cegedim SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transgene and Cegedim SA.
Diversification Opportunities for Transgene and Cegedim SA
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Transgene and Cegedim is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Transgene SA and Cegedim SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cegedim SA and Transgene 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 Transgene SA are associated (or correlated) with Cegedim SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cegedim SA has no effect on the direction of Transgene i.e., Transgene and Cegedim SA go up and down completely randomly.
Pair Corralation between Transgene and Cegedim SA
Assuming the 90 days trading horizon Transgene SA is expected to under-perform the Cegedim SA. In addition to that, Transgene is 1.37 times more volatile than Cegedim SA. It trades about -0.05 of its total potential returns per unit of risk. Cegedim SA is currently generating about -0.02 per unit of volatility. If you would invest 1,472 in Cegedim SA on August 30, 2024 and sell it today you would lose (382.00) from holding Cegedim SA or give up 25.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transgene SA vs. Cegedim SA
Performance |
| Timeline |
| Transgene SA |
| Cegedim SA |
Transgene and Cegedim SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transgene and Cegedim SA
The main advantage of trading using opposite Transgene and Cegedim SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transgene position performs unexpectedly, Cegedim 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 Cegedim SA will offset losses from the drop in Cegedim SA's long position.| Transgene vs. Innate Pharma | Transgene vs. Nanobiotix SA | Transgene vs. Genfit | Transgene vs. AB Science SA |
| Cegedim SA vs. Bonduelle SCA | Cegedim SA vs. Boiron SA | Cegedim SA vs. Assystem SA | Cegedim SA vs. Lectra 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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