Correlation Between Safran SA and Legrand SA
Can any of the company-specific risk be diversified away by investing in both Safran SA and Legrand 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 Legrand 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 Legrand SA, you can compare the effects of market volatilities on Safran SA and Legrand 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 Legrand SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safran SA and Legrand SA.
Diversification Opportunities for Safran SA and Legrand SA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Safran and Legrand is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Safran SA and Legrand SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legrand 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 Legrand SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legrand SA has no effect on the direction of Safran SA i.e., Safran SA and Legrand SA go up and down completely randomly.
Pair Corralation between Safran SA and Legrand SA
Assuming the 90 days horizon Safran SA is expected to generate 0.37 times more return on investment than Legrand SA. However, Safran SA is 2.72 times less risky than Legrand SA. It trades about 0.0 of its potential returns per unit of risk. Legrand SA is currently generating about -0.13 per unit of risk. If you would invest 35,527 in Safran SA on August 20, 2025 and sell it today you would lose (27.00) from holding Safran SA or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safran SA vs. Legrand SA
Performance |
| Timeline |
| Safran SA |
| Legrand SA |
Safran SA and Legrand SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safran SA and Legrand SA
The main advantage of trading using opposite Safran SA and Legrand SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safran SA position performs unexpectedly, Legrand 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 Legrand SA will offset losses from the drop in Legrand SA's long position.| Safran SA vs. Thales SA ADR | Safran SA vs. MTU Aero Engines | Safran SA vs. Conrad Industries | Safran SA vs. Leonardo SpA ADR |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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