Correlation Between SES SA and Fonu2

Can any of the company-specific risk be diversified away by investing in both SES SA and Fonu2 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 SES SA and Fonu2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SES SA and Fonu2 Inc, you can compare the effects of market volatilities on SES SA and Fonu2 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 SES SA with a short position of Fonu2. Check out your portfolio center. Please also check ongoing floating volatility patterns of SES SA and Fonu2.

Diversification Opportunities for SES SA and Fonu2

0.62

Correlation Coefficient

SES SA  Fonu2

Poor diversification

The 3 months correlation between SES and Fonu2 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SES SA and Fonu2 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonu2 Inc and SES 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 SES SA are associated (or correlated) with Fonu2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonu2 Inc has no effect on the direction of SES SA i.e., SES SA and Fonu2 go up and down completely randomly.

Pair Corralation between SES SA and Fonu2

Assuming the 90 days horizon SES SA is expected to generate 12.9 times less return on investment than Fonu2. But when comparing it to its historical volatility, SES SA is 21.94 times less risky than Fonu2. It trades about 0.22 of its potential returns per unit of risk. Fonu2 Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Fonu2 Inc on December 27, 2024 and sell it today you would earn a total of  0.01  from holding Fonu2 Inc or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.67%
Values	Daily Returns

SES SA  vs.  Fonu2 Inc

SES SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SES SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, SES SA reported solid returns over the last few months and may actually be approaching a breakup point.

Fonu2 Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fonu2 Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Fonu2 unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SES SA and Fonu2

The main advantage of trading using opposite SES SA and Fonu2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SES SA position performs unexpectedly, Fonu2 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 Fonu2 will offset losses from the drop in Fonu2's long position.

The idea behind SES SA and Fonu2 Inc 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.