Correlation Between Seche Environnement and Spire Healthcare

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

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

Diversification Opportunities for Seche Environnement and Spire Healthcare

0.81

Correlation Coefficient

Seche Environnement  Spire Healthcare

Very poor diversification

The 3 months correlation between Seche and Spire is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and Spire Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Healthcare and Seche 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 Seche Environnement SA are associated (or correlated) with Spire Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Healthcare has no effect on the direction of Seche Environnement i.e., Seche Environnement and Spire Healthcare go up and down completely randomly.

Pair Corralation between Seche Environnement and Spire Healthcare

Assuming the 90 days trading horizon Seche Environnement SA is expected to generate 1.54 times more return on investment than Spire Healthcare. However, Seche Environnement is 1.54 times more volatile than Spire Healthcare Group. It trades about 0.21 of its potential returns per unit of risk. Spire Healthcare Group is currently generating about 0.27 per unit of risk. If you would invest  7,780  in Seche Environnement SA on April 20, 2025 and sell it today you would earn a total of  2,480  from holding Seche Environnement SA or generate 31.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.88%
Values	Daily Returns

Seche Environnement SA  vs.  Spire Healthcare Group

Seche Environnement

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Seche Environnement SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Seche Environnement unveiled solid returns over the last few months and may actually be approaching a breakup point.

Spire Healthcare

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spire Healthcare Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Spire Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seche Environnement and Spire Healthcare

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

The idea behind Seche Environnement SA and Spire Healthcare Group 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.