Correlation Between Vinci SA and Soditech

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

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

Diversification Opportunities for Vinci SA and Soditech

0.06

Correlation Coefficient

Vinci SA  Soditech

Significant diversification

The 3 months correlation between Vinci and Soditech is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Vinci SA and Soditech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soditech SA and Vinci SA 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 Vinci SA are associated (or correlated) with Soditech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soditech SA has no effect on the direction of Vinci SA i.e., Vinci SA and Soditech go up and down completely randomly.

Pair Corralation between Vinci SA and Soditech

Assuming the 90 days horizon Vinci SA is expected to generate 10.96 times less return on investment than Soditech. But when comparing it to its historical volatility, Vinci SA is 5.05 times less risky than Soditech. It trades about 0.01 of its potential returns per unit of risk. Soditech SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  158.00  in Soditech SA on September 17, 2024 and sell it today you would lose (33.00) from holding Soditech SA or give up 20.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.84%
Values	Daily Returns

Vinci SA  vs.  Soditech SA

Vinci SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinci 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.

Soditech SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vinci SA and Soditech

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

The idea behind Vinci SA and Soditech 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.