Correlation Between Chargeurs and Sergeferrari

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

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

Diversification Opportunities for Chargeurs and Sergeferrari

-0.32

Correlation Coefficient

Chargeurs  Sergeferrari

Very good diversification

The 3 months correlation between Chargeurs and Sergeferrari is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Chargeurs SA and Sergeferrari G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sergeferrari G and Chargeurs 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 Chargeurs SA are associated (or correlated) with Sergeferrari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sergeferrari G has no effect on the direction of Chargeurs i.e., Chargeurs and Sergeferrari go up and down completely randomly.

Pair Corralation between Chargeurs and Sergeferrari

Assuming the 90 days trading horizon Chargeurs SA is expected to under-perform the Sergeferrari. In addition to that, Chargeurs is 1.02 times more volatile than Sergeferrari G. It trades about -0.02 of its total potential returns per unit of risk. Sergeferrari G is currently generating about 0.01 per unit of volatility. If you would invest  566.00  in Sergeferrari G on October 22, 2024 and sell it today you would lose (14.00) from holding Sergeferrari G or give up 2.47% of portfolio value over 90 days.

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

Chargeurs SA  vs.  Sergeferrari G

Chargeurs SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sergeferrari G

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sergeferrari G are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sergeferrari may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Chargeurs and Sergeferrari

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

The idea behind Chargeurs SA and Sergeferrari G 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.