Correlation Between SBF 120 and Eramet SA
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By analyzing existing cross correlation between SBF 120 and Eramet SA, you can compare the effects of market volatilities on SBF 120 and Eramet 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 SBF 120 with a short position of Eramet SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBF 120 and Eramet SA.
Diversification Opportunities for SBF 120 and Eramet SA
Very weak diversification
The 3 months correlation between SBF and Eramet is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SBF 120 and Eramet SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eramet SA 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 Eramet SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eramet SA has no effect on the direction of SBF 120 i.e., SBF 120 and Eramet SA go up and down completely randomly.
Pair Corralation between SBF 120 and Eramet SA
Assuming the 90 days trading horizon SBF 120 is expected to under-perform the Eramet SA. But the index apears to be less risky and, when comparing its historical volatility, SBF 120 is 5.15 times less risky than Eramet SA. The index trades about -0.06 of its potential returns per unit of risk. The Eramet SA is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 7,270 in Eramet SA on February 1, 2024 and sell it today you would earn a total of 1,865 from holding Eramet SA or generate 25.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SBF 120 vs. Eramet SA
Performance |
Timeline |
SBF 120 and Eramet SA Volatility Contrast
Predicted Return Density |
Returns |
SBF 120
Pair trading matchups for SBF 120
Eramet SA
Pair trading matchups for Eramet SA
Pair Trading with SBF 120 and Eramet SA
The main advantage of trading using opposite SBF 120 and Eramet SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBF 120 position performs unexpectedly, Eramet 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 Eramet SA will offset losses from the drop in Eramet SA's long position.SBF 120 vs. Linedata Services SA | SBF 120 vs. Ubisoft Entertainment | SBF 120 vs. Innelec Multimedia | SBF 120 vs. Broadpeak SA |
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 CEOs Directory module to screen CEOs from public companies around the world.
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