Correlation Between Sogeclair and Hotelim Socit

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

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

Diversification Opportunities for Sogeclair and Hotelim Socit

0.81

Correlation Coefficient

Sogeclair  Hotelim Socit

Very poor diversification

The 3 months correlation between Sogeclair and Hotelim is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sogeclair SA and Hotelim Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotelim Socit Anonyme 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 Hotelim Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotelim Socit Anonyme has no effect on the direction of Sogeclair i.e., Sogeclair and Hotelim Socit go up and down completely randomly.

Pair Corralation between Sogeclair and Hotelim Socit

Assuming the 90 days trading horizon Sogeclair is expected to generate 1.09 times less return on investment than Hotelim Socit. In addition to that, Sogeclair is 1.12 times more volatile than Hotelim Socit Anonyme. It trades about 0.24 of its total potential returns per unit of risk. Hotelim Socit Anonyme is currently generating about 0.29 per unit of volatility. If you would invest  3,700  in Hotelim Socit Anonyme on December 30, 2024 and sell it today you would earn a total of  1,800  from holding Hotelim Socit Anonyme or generate 48.65% return on investment over 90 days.

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

Sogeclair SA  vs.  Hotelim Socit Anonyme

Sogeclair SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sogeclair SA are ranked lower than 18 (%) 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.

Hotelim Socit Anonyme

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hotelim Socit Anonyme are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Hotelim Socit reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sogeclair and Hotelim Socit

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

The idea behind Sogeclair SA and Hotelim Socit Anonyme 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 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.