Correlation Between Manitou BF and Sopra Steria
Can any of the company-specific risk be diversified away by investing in both Manitou BF and Sopra Steria 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 Manitou BF and Sopra Steria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitou BF SA and Sopra Steria Group, you can compare the effects of market volatilities on Manitou BF and Sopra Steria 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 Manitou BF with a short position of Sopra Steria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and Sopra Steria.
Diversification Opportunities for Manitou BF and Sopra Steria
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Manitou and Sopra is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Sopra Steria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sopra Steria Group and Manitou BF 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 Manitou BF SA are associated (or correlated) with Sopra Steria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sopra Steria Group has no effect on the direction of Manitou BF i.e., Manitou BF and Sopra Steria go up and down completely randomly.
Pair Corralation between Manitou BF and Sopra Steria
Assuming the 90 days trading horizon Manitou BF SA is expected to under-perform the Sopra Steria. In addition to that, Manitou BF is 1.06 times more volatile than Sopra Steria Group. It trades about -0.02 of its total potential returns per unit of risk. Sopra Steria Group is currently generating about 0.03 per unit of volatility. If you would invest 14,024 in Sopra Steria Group on September 26, 2024 and sell it today you would earn a total of 2,716 from holding Sopra Steria Group or generate 19.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Manitou BF SA vs. Sopra Steria Group
Performance |
Timeline |
Manitou BF SA |
Sopra Steria Group |
Manitou BF and Sopra Steria Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Manitou BF and Sopra Steria
The main advantage of trading using opposite Manitou BF and Sopra Steria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF position performs unexpectedly, Sopra Steria 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 Sopra Steria will offset losses from the drop in Sopra Steria's long position.Manitou BF vs. Pernod Ricard SA | Manitou BF vs. Compagnie Generale des | Manitou BF vs. Compagnie de Saint Gobain |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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