Correlation Between Groupe Sfpi and Waga Energy

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

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

Diversification Opportunities for Groupe Sfpi and Waga Energy

0.15

Correlation Coefficient

Groupe Sfpi  Waga Energy

Average diversification

The 3 months correlation between Groupe and Waga is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Sfpi and Waga Energy SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waga Energy SA and Groupe Sfpi 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 Groupe Sfpi are associated (or correlated) with Waga Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waga Energy SA has no effect on the direction of Groupe Sfpi i.e., Groupe Sfpi and Waga Energy go up and down completely randomly.

Pair Corralation between Groupe Sfpi and Waga Energy

Assuming the 90 days trading horizon Groupe Sfpi is expected to generate 0.56 times more return on investment than Waga Energy. However, Groupe Sfpi is 1.78 times less risky than Waga Energy. It trades about -0.05 of its potential returns per unit of risk. Waga Energy SA is currently generating about -0.19 per unit of risk. If you would invest  209.00  in Groupe Sfpi on December 30, 2024 and sell it today you would lose (14.00) from holding Groupe Sfpi or give up 6.7% of portfolio value over 90 days.

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

Groupe Sfpi  vs.  Waga Energy SA

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.

Waga Energy SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Waga Energy SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Groupe Sfpi and Waga Energy

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

The idea behind Groupe Sfpi and Waga Energy SA 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.