Correlation Between Societe Generale and Western Asset
Can any of the company-specific risk be diversified away by investing in both Societe Generale and Western Asset 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 Societe Generale and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Societe Generale ADR and Western Asset Global, you can compare the effects of market volatilities on Societe Generale and Western Asset 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 Societe Generale with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Societe Generale and Western Asset.
Diversification Opportunities for Societe Generale and Western Asset
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Societe and Western is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Societe Generale ADR and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Societe Generale 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 Societe Generale ADR are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of Societe Generale i.e., Societe Generale and Western Asset go up and down completely randomly.
Pair Corralation between Societe Generale and Western Asset
Assuming the 90 days horizon Societe Generale ADR is expected to generate 3.65 times more return on investment than Western Asset. However, Societe Generale is 3.65 times more volatile than Western Asset Global. It trades about 0.03 of its potential returns per unit of risk. Western Asset Global is currently generating about 0.06 per unit of risk. If you would invest 499.00 in Societe Generale ADR on September 7, 2024 and sell it today you would earn a total of 48.00 from holding Societe Generale ADR or generate 9.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Societe Generale ADR vs. Western Asset Global
Performance |
Timeline |
Societe Generale ADR |
Western Asset Global |
Societe Generale and Western Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Societe Generale and Western Asset
The main advantage of trading using opposite Societe Generale and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Societe Generale position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.Societe Generale vs. BNP Paribas SA | Societe Generale vs. Credit Agricole SA | Societe Generale vs. Intesa Sanpaolo SpA | Societe Generale vs. Commerzbank AG PK |
Western Asset vs. MFS Investment Grade | Western Asset vs. Invesco High Income | Western Asset vs. Eaton Vance National | Western Asset vs. Blackrock Muniholdings Ny |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |