Correlation Between Mulberry Group and Seche Environnement

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

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

Diversification Opportunities for Mulberry Group and Seche Environnement

0.24

Correlation Coefficient

Mulberry Group  Seche Environnement

Modest diversification

The 3 months correlation between Mulberry and Seche is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Seche Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seche Environnement and Mulberry Group 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 Mulberry Group PLC are associated (or correlated) with Seche Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seche Environnement has no effect on the direction of Mulberry Group i.e., Mulberry Group and Seche Environnement go up and down completely randomly.

Pair Corralation between Mulberry Group and Seche Environnement

Assuming the 90 days trading horizon Mulberry Group PLC is expected to under-perform the Seche Environnement. In addition to that, Mulberry Group is 1.72 times more volatile than Seche Environnement SA. It trades about -0.09 of its total potential returns per unit of risk. Seche Environnement SA is currently generating about -0.06 per unit of volatility. If you would invest  8,540  in Seche Environnement SA on October 13, 2024 and sell it today you would lose (730.00) from holding Seche Environnement SA or give up 8.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mulberry Group PLC  vs.  Seche Environnement SA

Mulberry Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mulberry Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Seche Environnement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seche Environnement SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Mulberry Group and Seche Environnement

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

The idea behind Mulberry Group PLC and Seche Environnement 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.