Correlation Between Samse SA and Aeroports

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

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

Diversification Opportunities for Samse SA and Aeroports

0.01

Correlation Coefficient

Samse SA  Aeroports

Significant diversification

The 3 months correlation between Samse and Aeroports is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Samse SA and Aeroports de Paris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroports de Paris and Samse SA 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 Samse SA are associated (or correlated) with Aeroports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroports de Paris has no effect on the direction of Samse SA i.e., Samse SA and Aeroports go up and down completely randomly.

Pair Corralation between Samse SA and Aeroports

Assuming the 90 days trading horizon Samse SA is expected to under-perform the Aeroports. In addition to that, Samse SA is 1.34 times more volatile than Aeroports de Paris. It trades about -0.19 of its total potential returns per unit of risk. Aeroports de Paris is currently generating about 0.31 per unit of volatility. If you would invest  10,370  in Aeroports de Paris on September 14, 2024 and sell it today you would earn a total of  1,020  from holding Aeroports de Paris or generate 9.84% return on investment over 90 days.

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

Samse SA  vs.  Aeroports de Paris

Samse SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samse SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Samse SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aeroports de Paris

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aeroports de Paris has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Aeroports is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Samse SA and Aeroports

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

The idea behind Samse SA and Aeroports de Paris 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.