Correlation Between Sofina Socit and Shurgard Self

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

Diversification Opportunities for Sofina Socit and Shurgard Self

0.65

Correlation Coefficient

Sofina Socit  Shurgard Self

Poor diversification

The 3 months correlation between Sofina and Shurgard is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme and Shurgard Self Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shurgard Self Storage 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 Shurgard Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shurgard Self Storage has no effect on the direction of Sofina Socit i.e., Sofina Socit and Shurgard Self go up and down completely randomly.

Pair Corralation between Sofina Socit and Shurgard Self

Assuming the 90 days trading horizon Sofina Socit Anonyme is expected to generate 0.76 times more return on investment than Shurgard Self. However, Sofina Socit Anonyme is 1.32 times less risky than Shurgard Self. It trades about 0.16 of its potential returns per unit of risk. Shurgard Self Storage is currently generating about -0.27 per unit of risk. If you would invest  21,580  in Sofina Socit Anonyme on October 10, 2024 and sell it today you would earn a total of  640.00  from holding Sofina Socit Anonyme or generate 2.97% return on investment over 90 days.

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

Sofina Socit Anonyme  vs.  Shurgard Self Storage

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 latest weak performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Shurgard Self Storage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shurgard Self Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Sofina Socit and Shurgard Self

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

The idea behind Sofina Socit Anonyme and Shurgard Self Storage 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.