Correlation Between Seche Environnem and Groupe Sfpi

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

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

Diversification Opportunities for Seche Environnem and Groupe Sfpi

-0.37

Correlation Coefficient

Seche Environnem  Groupe Sfpi

Very good diversification

The 3 months correlation between Seche and Groupe is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnem and Groupe Sfpi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Sfpi and Seche Environnem 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 Seche Environnem are associated (or correlated) with Groupe Sfpi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Sfpi has no effect on the direction of Seche Environnem i.e., Seche Environnem and Groupe Sfpi go up and down completely randomly.

Pair Corralation between Seche Environnem and Groupe Sfpi

Assuming the 90 days trading horizon Seche Environnem is expected to generate 1.55 times more return on investment than Groupe Sfpi. However, Seche Environnem is 1.55 times more volatile than Groupe Sfpi. It trades about 0.03 of its potential returns per unit of risk. Groupe Sfpi is currently generating about -0.05 per unit of risk. If you would invest  7,530  in Seche Environnem on December 23, 2024 and sell it today you would earn a total of  210.00  from holding Seche Environnem or generate 2.79% return on investment over 90 days.

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

Seche Environnem  vs.  Groupe Sfpi

Seche Environnem

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Seche Environnem are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Seche Environnem is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Groupe Sfpi

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Seche Environnem and Groupe Sfpi

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

The idea behind Seche Environnem and Groupe Sfpi 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.