Correlation Between Stradim Espace and Sanofi SA

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

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

Diversification Opportunities for Stradim Espace and Sanofi SA

-0.05

Correlation Coefficient

Stradim Espace  Sanofi SA

Good diversification

The 3 months correlation between Stradim and Sanofi is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Stradim Espace Finances and Sanofi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanofi SA and Stradim Espace 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 Stradim Espace Finances are associated (or correlated) with Sanofi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanofi SA has no effect on the direction of Stradim Espace i.e., Stradim Espace and Sanofi SA go up and down completely randomly.

Pair Corralation between Stradim Espace and Sanofi SA

Assuming the 90 days trading horizon Stradim Espace is expected to generate 1.39 times less return on investment than Sanofi SA. In addition to that, Stradim Espace is 7.23 times more volatile than Sanofi SA. It trades about 0.01 of its total potential returns per unit of risk. Sanofi SA is currently generating about 0.14 per unit of volatility. If you would invest  9,314  in Sanofi SA on December 28, 2024 and sell it today you would earn a total of  872.00  from holding Sanofi SA or generate 9.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Stradim Espace Finances  vs.  Sanofi SA

Stradim Espace Finances

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stradim Espace Finances are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Stradim Espace may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sanofi SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sanofi SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sanofi SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Stradim Espace and Sanofi SA

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

The idea behind Stradim Espace Finances and Sanofi 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 Transaction History module to view history of all your transactions and understand their impact on performance.