Correlation Between Soitec SA and Manitou BF

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

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

Diversification Opportunities for Soitec SA and Manitou BF

0.24

Correlation Coefficient

Soitec SA  Manitou BF

Modest diversification

The 3 months correlation between Soitec and Manitou is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Soitec SA and Manitou BF SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitou BF SA and Soitec 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 Soitec SA are associated (or correlated) with Manitou BF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitou BF SA has no effect on the direction of Soitec SA i.e., Soitec SA and Manitou BF go up and down completely randomly.

Pair Corralation between Soitec SA and Manitou BF

Assuming the 90 days trading horizon Soitec SA is expected to under-perform the Manitou BF. In addition to that, Soitec SA is 1.42 times more volatile than Manitou BF SA. It trades about -0.02 of its total potential returns per unit of risk. Manitou BF SA is currently generating about -0.02 per unit of volatility. If you would invest  2,266  in Manitou BF SA on September 27, 2024 and sell it today you would lose (642.00) from holding Manitou BF SA or give up 28.33% of portfolio value over 90 days.

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

Soitec SA  vs.  Manitou BF SA

Soitec SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Soitec SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Manitou BF SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manitou BF SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Soitec SA and Manitou BF

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

The idea behind Soitec SA and Manitou BF 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.