Correlation Between SBF 120 and OVH Groupe

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SBF 120 and OVH Groupe 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 SBF 120 and OVH Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBF 120 and OVH Groupe SAS, you can compare the effects of market volatilities on SBF 120 and OVH Groupe 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 SBF 120 with a short position of OVH Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBF 120 and OVH Groupe.

Diversification Opportunities for SBF 120 and OVH Groupe

-0.7
  Correlation Coefficient

Excellent diversification

The 3 months correlation between SBF and OVH is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding SBF 120 and OVH Groupe SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OVH Groupe SAS and SBF 120 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 SBF 120 are associated (or correlated) with OVH Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OVH Groupe SAS has no effect on the direction of SBF 120 i.e., SBF 120 and OVH Groupe go up and down completely randomly.
    Optimize

Pair Corralation between SBF 120 and OVH Groupe

Assuming the 90 days trading horizon SBF 120 is expected to generate 0.36 times more return on investment than OVH Groupe. However, SBF 120 is 2.79 times less risky than OVH Groupe. It trades about 0.15 of its potential returns per unit of risk. OVH Groupe SAS is currently generating about -0.09 per unit of risk. If you would invest  554,013  in SBF 120 on December 28, 2024 and sell it today you would earn a total of  45,185  from holding SBF 120 or generate 8.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

SBF 120  vs.  OVH Groupe SAS

 Performance 
       Timeline  

SBF 120 and OVH Groupe Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SBF 120 and OVH Groupe

The main advantage of trading using opposite SBF 120 and OVH Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBF 120 position performs unexpectedly, OVH Groupe 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 OVH Groupe will offset losses from the drop in OVH Groupe's long position.
The idea behind SBF 120 and OVH Groupe SAS 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities