Correlation Between Savencia and VIEL Cie

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

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

Diversification Opportunities for Savencia and VIEL Cie

0.0

Correlation Coefficient

Savencia  VIEL Cie

Pay attention - limited upside

The 3 months correlation between Savencia and VIEL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Savencia SA and VIEL Cie socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIEL Cie socit and Savencia 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 Savencia SA are associated (or correlated) with VIEL Cie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIEL Cie socit has no effect on the direction of Savencia i.e., Savencia and VIEL Cie go up and down completely randomly.

Pair Corralation between Savencia and VIEL Cie

Assuming the 90 days trading horizon Savencia is expected to generate 1.15 times less return on investment than VIEL Cie. But when comparing it to its historical volatility, Savencia SA is 1.25 times less risky than VIEL Cie. It trades about 0.13 of its potential returns per unit of risk. VIEL Cie socit is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,135  in VIEL Cie socit on December 30, 2024 and sell it today you would earn a total of  175.00  from holding VIEL Cie socit or generate 15.42% return on investment over 90 days.

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

Savencia SA  vs.  VIEL Cie socit

Savencia SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Savencia SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Savencia sustained solid returns over the last few months and may actually be approaching a breakup point.

VIEL Cie socit

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VIEL Cie socit are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, VIEL Cie sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Savencia and VIEL Cie

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

The idea behind Savencia SA and VIEL Cie socit 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.