Correlation Between Sodexo SA and Clasquin

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

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

Diversification Opportunities for Sodexo SA and Clasquin

0.15

Correlation Coefficient

Sodexo SA  Clasquin

Average diversification

The 3 months correlation between Sodexo and Clasquin is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sodexo SA and Clasquin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clasquin and Sodexo 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 Sodexo SA are associated (or correlated) with Clasquin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clasquin has no effect on the direction of Sodexo SA i.e., Sodexo SA and Clasquin go up and down completely randomly.

Pair Corralation between Sodexo SA and Clasquin

Assuming the 90 days horizon Sodexo SA is expected to under-perform the Clasquin. In addition to that, Sodexo SA is 5.87 times more volatile than Clasquin. It trades about -0.02 of its total potential returns per unit of risk. Clasquin is currently generating about 0.14 per unit of volatility. If you would invest  13,850  in Clasquin on September 3, 2024 and sell it today you would earn a total of  315.00  from holding Clasquin or generate 2.27% return on investment over 90 days.

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

Sodexo SA  vs.  Clasquin

Sodexo SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sodexo SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sodexo SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clasquin

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clasquin are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Clasquin 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 Sodexo SA and Clasquin

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

The idea behind Sodexo SA and Clasquin 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 Transaction History module to view history of all your transactions and understand their impact on performance.