Correlation Between Metalliance and Sogeclair

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

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

Diversification Opportunities for Metalliance and Sogeclair

0.0

Correlation Coefficient

Metalliance  Sogeclair

Pay attention - limited upside

The 3 months correlation between Metalliance and Sogeclair is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Metalliance SA and Sogeclair SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sogeclair SA and Metalliance 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 Metalliance SA are associated (or correlated) with Sogeclair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sogeclair SA has no effect on the direction of Metalliance i.e., Metalliance and Sogeclair go up and down completely randomly.

Pair Corralation between Metalliance and Sogeclair

Assuming the 90 days trading horizon Metalliance SA is expected to under-perform the Sogeclair. But the stock apears to be less risky and, when comparing its historical volatility, Metalliance SA is 12.98 times less risky than Sogeclair. The stock trades about -0.1 of its potential returns per unit of risk. The Sogeclair SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,793  in Sogeclair SA on September 14, 2024 and sell it today you would earn a total of  87.00  from holding Sogeclair SA or generate 4.85% return on investment over 90 days.

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

Metalliance SA  vs.  Sogeclair SA

Metalliance SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metalliance SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Metalliance is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Sogeclair SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sogeclair SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Sogeclair is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Metalliance and Sogeclair

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

The idea behind Metalliance SA and Sogeclair 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.