Correlation Between Samse SA and Gaussin

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

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

Diversification Opportunities for Samse SA and Gaussin

0.29

Correlation Coefficient

Samse SA  Gaussin

Modest diversification

The 3 months correlation between Samse and Gaussin is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Samse SA and Gaussin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaussin 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 Gaussin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaussin has no effect on the direction of Samse SA i.e., Samse SA and Gaussin go up and down completely randomly.

Pair Corralation between Samse SA and Gaussin

Assuming the 90 days trading horizon Samse SA is expected to under-perform the Gaussin. But the stock apears to be less risky and, when comparing its historical volatility, Samse SA is 15.79 times less risky than Gaussin. The stock trades about -0.03 of its potential returns per unit of risk. The Gaussin is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Gaussin on September 14, 2024 and sell it today you would lose (2.00) from holding Gaussin or give up 15.38% of portfolio value over 90 days.

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

Samse SA  vs.  Gaussin

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.

Gaussin

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gaussin are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Gaussin reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samse SA and Gaussin

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

The idea behind Samse SA and Gaussin 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.