Correlation Between Sofina Socit and Quest For

Can any of the company-specific risk be diversified away by investing in both Sofina Socit and Quest For 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 Quest For 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 Quest For Growth, you can compare the effects of market volatilities on Sofina Socit and Quest For 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 Quest For. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofina Socit and Quest For.

Diversification Opportunities for Sofina Socit and Quest For

0.33

Correlation Coefficient

Sofina Socit  Quest For

Weak diversification

The 3 months correlation between Sofina and Quest is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme and Quest For Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quest For Growth 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 Quest For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quest For Growth has no effect on the direction of Sofina Socit i.e., Sofina Socit and Quest For go up and down completely randomly.

Pair Corralation between Sofina Socit and Quest For

Assuming the 90 days trading horizon Sofina Socit Anonyme is expected to generate 1.2 times more return on investment than Quest For. However, Sofina Socit is 1.2 times more volatile than Quest For Growth. It trades about 0.14 of its potential returns per unit of risk. Quest For Growth is currently generating about 0.12 per unit of risk. If you would invest  21,860  in Sofina Socit Anonyme on December 27, 2024 and sell it today you would earn a total of  2,900  from holding Sofina Socit Anonyme or generate 13.27% return on investment over 90 days.

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

Sofina Socit Anonyme  vs.  Quest For Growth

Sofina Socit Anonyme

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sofina Socit Anonyme are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Sofina Socit reported solid returns over the last few months and may actually be approaching a breakup point.

Quest For Growth

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quest For Growth are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Quest For may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sofina Socit and Quest For

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

The idea behind Sofina Socit Anonyme and Quest For Growth 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.