Correlation Between Fonciere Inea and Soc Centrale

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

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

Diversification Opportunities for Fonciere Inea and Soc Centrale

-0.04

Correlation Coefficient

Fonciere Inea  Soc Centrale

Good diversification

The 3 months correlation between Fonciere and Soc is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fonciere Inea and Soc Centrale Bois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soc Centrale Bois and Fonciere Inea 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 Fonciere Inea are associated (or correlated) with Soc Centrale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soc Centrale Bois has no effect on the direction of Fonciere Inea i.e., Fonciere Inea and Soc Centrale go up and down completely randomly.

Pair Corralation between Fonciere Inea and Soc Centrale

Assuming the 90 days trading horizon Fonciere Inea is expected to generate 1.1 times more return on investment than Soc Centrale. However, Fonciere Inea is 1.1 times more volatile than Soc Centrale Bois. It trades about 0.15 of its potential returns per unit of risk. Soc Centrale Bois is currently generating about 0.02 per unit of risk. If you would invest  3,130  in Fonciere Inea on December 27, 2024 and sell it today you would earn a total of  400.00  from holding Fonciere Inea or generate 12.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Fonciere Inea  vs.  Soc Centrale Bois

Fonciere Inea

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fonciere Inea are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fonciere Inea may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Soc Centrale Bois

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Soc Centrale Bois are ranked lower than 1 (%) 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.

Pair Trading with Fonciere Inea and Soc Centrale

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

The idea behind Fonciere Inea and Soc Centrale Bois 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.