Correlation Between Adocia and Sogeclair

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

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

Diversification Opportunities for Adocia and Sogeclair

-0.48

Correlation Coefficient

Adocia  Sogeclair

Very good diversification

The 3 months correlation between Adocia and Sogeclair is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Adocia and Sogeclair SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sogeclair SA and Adocia 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 Adocia are associated (or correlated) with Sogeclair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sogeclair SA has no effect on the direction of Adocia i.e., Adocia and Sogeclair go up and down completely randomly.

Pair Corralation between Adocia and Sogeclair

Assuming the 90 days trading horizon Adocia is expected to under-perform the Sogeclair. In addition to that, Adocia is 1.77 times more volatile than Sogeclair SA. It trades about -0.1 of its total potential returns per unit of risk. Sogeclair SA is currently generating about 0.1 per unit of volatility. If you would invest  1,785  in Sogeclair SA on December 1, 2024 and sell it today you would earn a total of  215.00  from holding Sogeclair SA or generate 12.04% return on investment over 90 days.

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

Adocia  vs.  Sogeclair SA

Adocia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adocia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sogeclair SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sogeclair SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sogeclair reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adocia and Sogeclair

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

The idea behind Adocia and Sogeclair SA 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.