Correlation Between Societe Generale and Bd Multimedia
Can any of the company-specific risk be diversified away by investing in both Societe Generale and Bd Multimedia 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 Societe Generale and Bd Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Societe Generale SA and Bd Multimedia, you can compare the effects of market volatilities on Societe Generale and Bd Multimedia 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 Societe Generale with a short position of Bd Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Societe Generale and Bd Multimedia.
Diversification Opportunities for Societe Generale and Bd Multimedia
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Societe and ALBDM is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Societe Generale SA and Bd Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bd Multimedia and Societe Generale 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 Societe Generale SA are associated (or correlated) with Bd Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bd Multimedia has no effect on the direction of Societe Generale i.e., Societe Generale and Bd Multimedia go up and down completely randomly.
Pair Corralation between Societe Generale and Bd Multimedia
Assuming the 90 days trading horizon Societe Generale SA is expected to generate 0.28 times more return on investment than Bd Multimedia. However, Societe Generale SA is 3.62 times less risky than Bd Multimedia. It trades about 0.04 of its potential returns per unit of risk. Bd Multimedia is currently generating about 0.01 per unit of risk. If you would invest 2,323 in Societe Generale SA on September 24, 2024 and sell it today you would earn a total of 346.00 from holding Societe Generale SA or generate 14.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Societe Generale SA vs. Bd Multimedia
Performance |
Timeline |
Societe Generale |
Bd Multimedia |
Societe Generale and Bd Multimedia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Societe Generale and Bd Multimedia
The main advantage of trading using opposite Societe Generale and Bd Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Societe Generale position performs unexpectedly, Bd Multimedia 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 Bd Multimedia will offset losses from the drop in Bd Multimedia's long position.Societe Generale vs. Credit Agricole SA | Societe Generale vs. AXA SA | Societe Generale vs. Sanofi SA | Societe Generale vs. Renault SA |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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