Correlation Between Sopra Steria and Atos SE

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Can any of the company-specific risk be diversified away by investing in both Sopra Steria and Atos SE 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 Sopra Steria and Atos SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sopra Steria Group and Atos SE, you can compare the effects of market volatilities on Sopra Steria and Atos SE 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 Sopra Steria with a short position of Atos SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sopra Steria and Atos SE.

Diversification Opportunities for Sopra Steria and Atos SE

-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Sopra and Atos is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sopra Steria Group and Atos SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atos SE and Sopra Steria 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 Sopra Steria Group are associated (or correlated) with Atos SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atos SE has no effect on the direction of Sopra Steria i.e., Sopra Steria and Atos SE go up and down completely randomly.

Pair Corralation between Sopra Steria and Atos SE

Assuming the 90 days trading horizon Sopra Steria Group is expected to generate 0.06 times more return on investment than Atos SE. However, Sopra Steria Group is 15.52 times less risky than Atos SE. It trades about -0.14 of its potential returns per unit of risk. Atos SE is currently generating about -0.08 per unit of risk. If you would invest  18,090  in Sopra Steria Group on September 24, 2024 and sell it today you would lose (1,480) from holding Sopra Steria Group or give up 8.18% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sopra Steria Group  vs.  Atos SE

 Performance 
       Timeline  
Sopra Steria Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sopra Steria Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Atos SE 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Atos SE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Atos SE sustained solid returns over the last few months and may actually be approaching a breakup point.

Sopra Steria and Atos SE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sopra Steria and Atos SE

The main advantage of trading using opposite Sopra Steria and Atos SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sopra Steria position performs unexpectedly, Atos SE 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 Atos SE will offset losses from the drop in Atos SE's long position.
The idea behind Sopra Steria Group and Atos SE 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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