Correlation Between Sopra Steria and BNPP BONDSRI

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

By analyzing existing cross correlation between Sopra Steria Group and BNPP BONDSRI ETF, you can compare the effects of market volatilities on Sopra Steria and BNPP BONDSRI 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 Sopra Steria with a short position of BNPP BONDSRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sopra Steria and BNPP BONDSRI.

Diversification Opportunities for Sopra Steria and BNPP BONDSRI

-0.37

Correlation Coefficient

Sopra Steria  BNPP BONDSRI

Very good diversification

The 3 months correlation between Sopra and BNPP is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sopra Steria Group and BNPP BONDSRI ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNPP BONDSRI ETF and Sopra Steria 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 Sopra Steria Group are associated (or correlated) with BNPP BONDSRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNPP BONDSRI ETF has no effect on the direction of Sopra Steria i.e., Sopra Steria and BNPP BONDSRI go up and down completely randomly.

Pair Corralation between Sopra Steria and BNPP BONDSRI

Assuming the 90 days trading horizon Sopra Steria Group is expected to under-perform the BNPP BONDSRI. In addition to that, Sopra Steria is 16.04 times more volatile than BNPP BONDSRI ETF. It trades about -0.11 of its total potential returns per unit of risk. BNPP BONDSRI ETF is currently generating about 0.03 per unit of volatility. If you would invest  947.00  in BNPP BONDSRI ETF on September 27, 2024 and sell it today you would earn a total of  1.00  from holding BNPP BONDSRI ETF or generate 0.11% return on investment over 90 days.

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

Sopra Steria Group  vs.  BNPP BONDSRI ETF

Sopra Steria Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sopra Steria Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

BNPP BONDSRI ETF

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BNPP BONDSRI ETF are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, BNPP BONDSRI is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sopra Steria and BNPP BONDSRI

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

The idea behind Sopra Steria Group and BNPP BONDSRI ETF 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.

Check out your portfolio center.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.