Correlation Between Seche Environnement and Third Point

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

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

Diversification Opportunities for Seche Environnement and Third Point

0.53

Correlation Coefficient

Seche Environnement  Third Point

Very weak diversification

The 3 months correlation between Seche and Third is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and Third Point Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Point Investors and Seche Environnement 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 Seche Environnement SA are associated (or correlated) with Third Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Point Investors has no effect on the direction of Seche Environnement i.e., Seche Environnement and Third Point go up and down completely randomly.

Pair Corralation between Seche Environnement and Third Point

Assuming the 90 days trading horizon Seche Environnement SA is expected to generate 0.97 times more return on investment than Third Point. However, Seche Environnement SA is 1.03 times less risky than Third Point. It trades about -0.38 of its potential returns per unit of risk. Third Point Investors is currently generating about -0.48 per unit of risk. If you would invest  9,410  in Seche Environnement SA on July 1, 2025 and sell it today you would lose (2,100) from holding Seche Environnement SA or give up 22.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	42.86%
Values	Daily Returns

Seche Environnement SA  vs.  Third Point Investors

Seche Environnement

Risk-Adjusted Performance

Weakest

Over the last 90 days Seche Environnement SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in October 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Third Point Investors

Risk-Adjusted Performance

Weakest

Over the last 90 days Third Point Investors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in October 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Seche Environnement and Third Point

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

The idea behind Seche Environnement SA and Third Point Investors 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.