Correlation Between CREDIT IMMOBILIER and SONASID

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

By analyzing existing cross correlation between CREDIT IMMOBILIER ET and SONASID, you can compare the effects of market volatilities on CREDIT IMMOBILIER and SONASID 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 CREDIT IMMOBILIER with a short position of SONASID. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREDIT IMMOBILIER and SONASID.

Diversification Opportunities for CREDIT IMMOBILIER and SONASID

0.38

Correlation Coefficient

CREDIT IMMOBILIER  SONASID

Weak diversification

The 3 months correlation between CREDIT and SONASID is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT IMMOBILIER ET and SONASID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SONASID and CREDIT IMMOBILIER 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 CREDIT IMMOBILIER ET are associated (or correlated) with SONASID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SONASID has no effect on the direction of CREDIT IMMOBILIER i.e., CREDIT IMMOBILIER and SONASID go up and down completely randomly.

Pair Corralation between CREDIT IMMOBILIER and SONASID

Assuming the 90 days trading horizon CREDIT IMMOBILIER is expected to generate 7.94 times less return on investment than SONASID. But when comparing it to its historical volatility, CREDIT IMMOBILIER ET is 1.91 times less risky than SONASID. It trades about 0.08 of its potential returns per unit of risk. SONASID is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  98,200  in SONASID on December 23, 2024 and sell it today you would earn a total of  100,900  from holding SONASID or generate 102.75% return on investment over 90 days.

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

CREDIT IMMOBILIER ET  vs.  SONASID

CREDIT IMMOBILIER

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CREDIT IMMOBILIER ET are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, CREDIT IMMOBILIER may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SONASID

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SONASID are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, SONASID exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CREDIT IMMOBILIER and SONASID

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

The idea behind CREDIT IMMOBILIER ET and SONASID 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.