Correlation Between Neovacs SA and Solocal Group
Can any of the company-specific risk be diversified away by investing in both Neovacs SA and Solocal Group 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 Neovacs SA and Solocal Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neovacs SA and Solocal Group SA, you can compare the effects of market volatilities on Neovacs SA and Solocal Group 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 Neovacs SA with a short position of Solocal Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neovacs SA and Solocal Group.
Diversification Opportunities for Neovacs SA and Solocal Group
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Neovacs and Solocal is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Neovacs SA and Solocal Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solocal Group SA and Neovacs SA 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 Neovacs SA are associated (or correlated) with Solocal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solocal Group SA has no effect on the direction of Neovacs SA i.e., Neovacs SA and Solocal Group go up and down completely randomly.
Pair Corralation between Neovacs SA and Solocal Group
Assuming the 90 days trading horizon Neovacs SA is expected to generate 6.5 times more return on investment than Solocal Group. However, Neovacs SA is 6.5 times more volatile than Solocal Group SA. It trades about 0.06 of its potential returns per unit of risk. Solocal Group SA is currently generating about -0.02 per unit of risk. If you would invest 0.07 in Neovacs SA on September 6, 2024 and sell it today you would lose (0.04) from holding Neovacs SA or give up 57.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Neovacs SA vs. Solocal Group SA
Performance |
Timeline |
Neovacs SA |
Solocal Group SA |
Neovacs SA and Solocal Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Neovacs SA and Solocal Group
The main advantage of trading using opposite Neovacs SA and Solocal Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neovacs SA position performs unexpectedly, Solocal Group 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 Solocal Group will offset losses from the drop in Solocal Group's long position.Neovacs SA vs. Europlasma SA | Neovacs SA vs. Biophytis SA | Neovacs SA vs. Cellectis | Neovacs SA vs. Innate Pharma |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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