Correlation Between SBF 120 and Stradim Espace

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SBF 120 and Stradim Espace 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 SBF 120 and Stradim Espace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBF 120 and Stradim Espace Finances, you can compare the effects of market volatilities on SBF 120 and Stradim Espace 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 SBF 120 with a short position of Stradim Espace. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBF 120 and Stradim Espace.

Diversification Opportunities for SBF 120 and Stradim Espace

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between SBF and Stradim is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding SBF 120 and Stradim Espace Finances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stradim Espace Finances and SBF 120 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 SBF 120 are associated (or correlated) with Stradim Espace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stradim Espace Finances has no effect on the direction of SBF 120 i.e., SBF 120 and Stradim Espace go up and down completely randomly.
    Optimize

Pair Corralation between SBF 120 and Stradim Espace

Assuming the 90 days trading horizon SBF 120 is expected to generate 10.84 times less return on investment than Stradim Espace. But when comparing it to its historical volatility, SBF 120 is 10.03 times less risky than Stradim Espace. It trades about 0.1 of its potential returns per unit of risk. Stradim Espace Finances is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  430.00  in Stradim Espace Finances on April 23, 2025 and sell it today you would earn a total of  170.00  from holding Stradim Espace Finances or generate 39.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SBF 120  vs.  Stradim Espace Finances

 Performance 
       Timeline  

SBF 120 and Stradim Espace Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SBF 120 and Stradim Espace

The main advantage of trading using opposite SBF 120 and Stradim Espace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBF 120 position performs unexpectedly, Stradim Espace 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 Stradim Espace will offset losses from the drop in Stradim Espace's long position.
The idea behind SBF 120 and Stradim Espace Finances 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity