Correlation Between SOGECLAIR and Wizz Air

Can any of the company-specific risk be diversified away by investing in both SOGECLAIR and Wizz Air 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 Wizz Air 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 Wizz Air Holdings, you can compare the effects of market volatilities on SOGECLAIR and Wizz Air 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 Wizz Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOGECLAIR and Wizz Air.

Diversification Opportunities for SOGECLAIR and Wizz Air

0.36

Correlation Coefficient

SOGECLAIR  Wizz Air

Weak diversification

The 3 months correlation between SOGECLAIR and Wizz is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding SOGECLAIR SA INH and Wizz Air Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wizz Air Holdings 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 Wizz Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wizz Air Holdings has no effect on the direction of SOGECLAIR i.e., SOGECLAIR and Wizz Air go up and down completely randomly.

Pair Corralation between SOGECLAIR and Wizz Air

Assuming the 90 days horizon SOGECLAIR SA INH is expected to generate 0.6 times more return on investment than Wizz Air. However, SOGECLAIR SA INH is 1.67 times less risky than Wizz Air. It trades about -0.01 of its potential returns per unit of risk. Wizz Air Holdings is currently generating about -0.06 per unit of risk. If you would invest  1,870  in SOGECLAIR SA INH on September 29, 2024 and sell it today you would lose (130.00) from holding SOGECLAIR SA INH or give up 6.95% of portfolio value over 90 days.

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

SOGECLAIR SA INH  vs.  Wizz Air Holdings

SOGECLAIR SA INH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SOGECLAIR SA INH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Wizz Air Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wizz Air Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Wizz Air is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SOGECLAIR and Wizz Air

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

The idea behind SOGECLAIR SA INH and Wizz Air Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.