Correlation Between Seche Environnement and Ricoh Co

Can any of the company-specific risk be diversified away by investing in both Seche Environnement and Ricoh Co 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 Seche Environnement and Ricoh Co into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seche Environnement SA and Ricoh Co, you can compare the effects of market volatilities on Seche Environnement and Ricoh Co 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 Seche Environnement with a short position of Ricoh Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnement and Ricoh Co.

Diversification Opportunities for Seche Environnement and Ricoh Co

-0.51

Correlation Coefficient

Seche Environnement  Ricoh Co

Excellent diversification

The 3 months correlation between Seche and Ricoh is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and Ricoh Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ricoh Co and Seche Environnement 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 Seche Environnement SA are associated (or correlated) with Ricoh Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ricoh Co has no effect on the direction of Seche Environnement i.e., Seche Environnement and Ricoh Co go up and down completely randomly.

Pair Corralation between Seche Environnement and Ricoh Co

Assuming the 90 days trading horizon Seche Environnement SA is expected to generate 1.05 times more return on investment than Ricoh Co. However, Seche Environnement is 1.05 times more volatile than Ricoh Co. It trades about 0.09 of its potential returns per unit of risk. Ricoh Co is currently generating about 0.0 per unit of risk. If you would invest  7,860  in Seche Environnement SA on December 4, 2024 and sell it today you would earn a total of  780.00  from holding Seche Environnement SA or generate 9.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Seche Environnement SA  vs.  Ricoh Co

Seche Environnement

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Seche Environnement SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Seche Environnement may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ricoh Co

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ricoh Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ricoh Co is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Seche Environnement and Ricoh Co

The main advantage of trading using opposite Seche Environnement and Ricoh Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnement position performs unexpectedly, Ricoh Co 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 Ricoh Co will offset losses from the drop in Ricoh Co's long position.

The idea behind Seche Environnement SA and Ricoh Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.