Correlation Between Sogeclair and Air France

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

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

Diversification Opportunities for Sogeclair and Air France

-0.09

Correlation Coefficient

Sogeclair  Air France

Good diversification

The 3 months correlation between Sogeclair and Air is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sogeclair SA and Air France KLM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM 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 are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of Sogeclair i.e., Sogeclair and Air France go up and down completely randomly.

Pair Corralation between Sogeclair and Air France

Assuming the 90 days trading horizon Sogeclair SA is expected to under-perform the Air France. But the stock apears to be less risky and, when comparing its historical volatility, Sogeclair SA is 1.33 times less risky than Air France. The stock trades about -0.16 of its potential returns per unit of risk. The Air France KLM SA is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  821.00  in Air France KLM SA on September 3, 2024 and sell it today you would lose (82.00) from holding Air France KLM SA or give up 9.99% of portfolio value over 90 days.

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

Sogeclair SA  vs.  Air France KLM SA

Sogeclair SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sogeclair SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Air France KLM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Air France KLM SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Sogeclair and Air France

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

The idea behind Sogeclair SA and Air France KLM 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.