Correlation Between Rubis SCA and Soitec SA

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

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

Diversification Opportunities for Rubis SCA and Soitec SA

-0.82

Correlation Coefficient

Rubis SCA  Soitec SA

Pay attention - limited upside

The 3 months correlation between Rubis and Soitec is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Rubis SCA and Soitec SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soitec SA and Rubis SCA 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 Rubis SCA are associated (or correlated) with Soitec SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soitec SA has no effect on the direction of Rubis SCA i.e., Rubis SCA and Soitec SA go up and down completely randomly.

Pair Corralation between Rubis SCA and Soitec SA

Assuming the 90 days trading horizon Rubis SCA is expected to generate 0.41 times more return on investment than Soitec SA. However, Rubis SCA is 2.44 times less risky than Soitec SA. It trades about 0.11 of its potential returns per unit of risk. Soitec SA is currently generating about -0.15 per unit of risk. If you would invest  2,346  in Rubis SCA on December 29, 2024 and sell it today you would earn a total of  292.00  from holding Rubis SCA or generate 12.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Rubis SCA  vs.  Soitec SA

Rubis SCA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rubis SCA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Rubis SCA sustained solid returns over the last few months and may actually be approaching a breakup point.

Soitec SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Soitec SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Rubis SCA and Soitec SA

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

The idea behind Rubis SCA and Soitec 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.