Correlation Between Soc Centrale and Immobiliere Dassault

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

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

Diversification Opportunities for Soc Centrale and Immobiliere Dassault

0.05

Correlation Coefficient

Soc Centrale  Immobiliere Dassault

Significant diversification

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

Pair Corralation between Soc Centrale and Immobiliere Dassault

Assuming the 90 days trading horizon Soc Centrale Bois is expected to generate 0.82 times more return on investment than Immobiliere Dassault. However, Soc Centrale Bois is 1.22 times less risky than Immobiliere Dassault. It trades about 0.05 of its potential returns per unit of risk. Immobiliere Dassault SA is currently generating about -0.01 per unit of risk. If you would invest  845.00  in Soc Centrale Bois on September 13, 2024 and sell it today you would earn a total of  25.00  from holding Soc Centrale Bois or generate 2.96% return on investment over 90 days.

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

Soc Centrale Bois  vs.  Immobiliere Dassault SA

Soc Centrale Bois

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Soc Centrale Bois are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Soc Centrale is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Immobiliere Dassault

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immobiliere Dassault SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Immobiliere Dassault is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Soc Centrale and Immobiliere Dassault

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

The idea behind Soc Centrale Bois and Immobiliere Dassault 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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.