Correlation Between Sofina Socit and Jensen

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

By analyzing existing cross correlation between Sofina Socit Anonyme and Jensen Group, you can compare the effects of market volatilities on Sofina Socit and Jensen 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 Sofina Socit with a short position of Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofina Socit and Jensen.

Diversification Opportunities for Sofina Socit and Jensen

-0.41

Correlation Coefficient

Sofina Socit  Jensen

Very good diversification

The 3 months correlation between Sofina and Jensen is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme and Jensen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Group and Sofina Socit 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 Sofina Socit Anonyme are associated (or correlated) with Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Group has no effect on the direction of Sofina Socit i.e., Sofina Socit and Jensen go up and down completely randomly.

Pair Corralation between Sofina Socit and Jensen

Assuming the 90 days trading horizon Sofina Socit is expected to generate 2.68 times less return on investment than Jensen. But when comparing it to its historical volatility, Sofina Socit Anonyme is 1.04 times less risky than Jensen. It trades about 0.02 of its potential returns per unit of risk. Jensen Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,227  in Jensen Group on September 12, 2024 and sell it today you would earn a total of  1,023  from holding Jensen Group or generate 31.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.4%
Values	Daily Returns

Sofina Socit Anonyme  vs.  Jensen Group

Sofina Socit Anonyme

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sofina Socit Anonyme has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Jensen Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jensen Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Jensen is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sofina Socit and Jensen

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

The idea behind Sofina Socit Anonyme and Jensen Group 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.