Correlation Between SOGECLAIR and Stockland

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

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

Diversification Opportunities for SOGECLAIR and Stockland

-0.31

Correlation Coefficient

SOGECLAIR  Stockland

Very good diversification

The 3 months correlation between SOGECLAIR and Stockland is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SOGECLAIR SA INH and Stockland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stockland and SOGECLAIR 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 SOGECLAIR SA INH are associated (or correlated) with Stockland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stockland has no effect on the direction of SOGECLAIR i.e., SOGECLAIR and Stockland go up and down completely randomly.

Pair Corralation between SOGECLAIR and Stockland

Assuming the 90 days horizon SOGECLAIR SA INH is expected to generate 2.01 times more return on investment than Stockland. However, SOGECLAIR is 2.01 times more volatile than Stockland. It trades about 0.07 of its potential returns per unit of risk. Stockland is currently generating about 0.02 per unit of risk. If you would invest  1,670  in SOGECLAIR SA INH on October 25, 2024 and sell it today you would earn a total of  190.00  from holding SOGECLAIR SA INH or generate 11.38% return on investment over 90 days.

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

SOGECLAIR SA INH  vs.  Stockland

SOGECLAIR SA INH

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SOGECLAIR SA INH are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SOGECLAIR reported solid returns over the last few months and may actually be approaching a breakup point.

Stockland

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stockland are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Stockland is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SOGECLAIR and Stockland

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

The idea behind SOGECLAIR SA INH and Stockland 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.