Correlation Between Passat Socit and Herige SA

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

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

Diversification Opportunities for Passat Socit and Herige SA

-0.34

Correlation Coefficient

Passat Socit  Herige SA

Very good diversification

The 3 months correlation between Passat and Herige is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Passat Socit Anonyme and Herige SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herige SA and Passat Socit 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 Passat Socit Anonyme are associated (or correlated) with Herige SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herige SA has no effect on the direction of Passat Socit i.e., Passat Socit and Herige SA go up and down completely randomly.

Pair Corralation between Passat Socit and Herige SA

Assuming the 90 days trading horizon Passat Socit is expected to generate 4.03 times less return on investment than Herige SA. In addition to that, Passat Socit is 1.34 times more volatile than Herige SA. It trades about 0.01 of its total potential returns per unit of risk. Herige SA is currently generating about 0.07 per unit of volatility. If you would invest  2,103  in Herige SA on April 25, 2025 and sell it today you would earn a total of  137.00  from holding Herige SA or generate 6.51% return on investment over 90 days.

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

Passat Socit Anonyme  vs.  Herige SA

Passat Socit Anonyme

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Passat Socit Anonyme are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Passat Socit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Herige SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Herige SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Herige SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Passat Socit and Herige SA

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

The idea behind Passat Socit Anonyme and Herige 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.