Correlation Between Veolia Environnement and SOCKET MOBILE

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

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

Diversification Opportunities for Veolia Environnement and SOCKET MOBILE

-0.79

Correlation Coefficient

Veolia Environnement  SOCKET MOBILE

Pay attention - limited upside

The 3 months correlation between Veolia and SOCKET is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement SA and SOCKET MOBILE NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOCKET MOBILE NEW and Veolia Environnement 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 Veolia Environnement SA are associated (or correlated) with SOCKET MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOCKET MOBILE NEW has no effect on the direction of Veolia Environnement i.e., Veolia Environnement and SOCKET MOBILE go up and down completely randomly.

Pair Corralation between Veolia Environnement and SOCKET MOBILE

Assuming the 90 days trading horizon Veolia Environnement SA is expected to under-perform the SOCKET MOBILE. But the stock apears to be less risky and, when comparing its historical volatility, Veolia Environnement SA is 3.85 times less risky than SOCKET MOBILE. The stock trades about -0.11 of its potential returns per unit of risk. The SOCKET MOBILE NEW is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  105.00  in SOCKET MOBILE NEW on October 25, 2024 and sell it today you would earn a total of  46.00  from holding SOCKET MOBILE NEW or generate 43.81% return on investment over 90 days.

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

Veolia Environnement SA  vs.  SOCKET MOBILE NEW

Veolia Environnement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veolia Environnement SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

SOCKET MOBILE NEW

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SOCKET MOBILE NEW are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental drivers, SOCKET MOBILE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Veolia Environnement and SOCKET MOBILE

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

The idea behind Veolia Environnement SA and SOCKET MOBILE NEW 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.