Correlation Between Safran SA and Safran SA

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

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

Diversification Opportunities for Safran SA and Safran SA

0.99

Correlation Coefficient

Safran SA  Safran SA

No risk reduction

The 3 months correlation between Safran and Safran is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Safran SA and Safran SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safran SA and Safran SA 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 Safran SA are associated (or correlated) with Safran SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safran SA has no effect on the direction of Safran SA i.e., Safran SA and Safran SA go up and down completely randomly.

Pair Corralation between Safran SA and Safran SA

Assuming the 90 days horizon Safran SA is expected to under-perform the Safran SA. In addition to that, Safran SA is 1.24 times more volatile than Safran SA. It trades about -0.04 of its total potential returns per unit of risk. Safran SA is currently generating about -0.02 per unit of volatility. If you would invest  5,626  in Safran SA on January 24, 2024 and sell it today you would lose (36.00) from holding Safran SA or give up 0.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Safran SA  vs.  Safran SA

Safran SA

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Safran SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Safran SA reported solid returns over the last few months and may actually be approaching a breakup point.

Safran SA

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Safran SA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Safran SA showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Safran SA and Safran SA

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

The idea behind Safran SA and Safran SA 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.