Correlation Between Socit Des and Gecina SA

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

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

Diversification Opportunities for Socit Des and Gecina SA

-0.88

Correlation Coefficient

Socit Des  Gecina SA

Pay attention - limited upside

The 3 months correlation between Socit and Gecina is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Socit des Chemins and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA and Socit Des 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 Socit des Chemins are associated (or correlated) with Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of Socit Des i.e., Socit Des and Gecina SA go up and down completely randomly.

Pair Corralation between Socit Des and Gecina SA

If you would invest  1,050,000  in Socit des Chemins on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Socit des Chemins or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	18.18%
Values	Daily Returns

Socit des Chemins  vs.  Gecina SA

Socit des Chemins

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Socit des Chemins has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Socit Des reported solid returns over the last few months and may actually be approaching a breakup point.

Gecina SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gecina SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Socit Des and Gecina SA

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

The idea behind Socit des Chemins and Gecina 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.