Correlation Between Sofina Socit and Greenyard

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

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

Diversification Opportunities for Sofina Socit and Greenyard

0.8

Correlation Coefficient

Sofina Socit  Greenyard

Very poor diversification

The 3 months correlation between Sofina and Greenyard is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme and Greenyard NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenyard NV and Sofina 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 Sofina Socit Anonyme are associated (or correlated) with Greenyard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenyard NV has no effect on the direction of Sofina Socit i.e., Sofina Socit and Greenyard go up and down completely randomly.

Pair Corralation between Sofina Socit and Greenyard

Assuming the 90 days trading horizon Sofina Socit Anonyme is expected to generate 0.58 times more return on investment than Greenyard. However, Sofina Socit Anonyme is 1.71 times less risky than Greenyard. It trades about -0.24 of its potential returns per unit of risk. Greenyard NV is currently generating about -0.15 per unit of risk. If you would invest  25,340  in Sofina Socit Anonyme on September 22, 2024 and sell it today you would lose (3,800) from holding Sofina Socit Anonyme or give up 15.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.48%
Values	Daily Returns

Sofina Socit Anonyme  vs.  Greenyard NV

Sofina Socit Anonyme

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sofina Socit Anonyme has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Greenyard NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenyard NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sofina Socit and Greenyard

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

The idea behind Sofina Socit Anonyme and Greenyard NV 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.