Correlation Between SGS SA and Partners

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

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

Diversification Opportunities for SGS SA and Partners

0.46

Correlation Coefficient

SGS SA  Partners

Very weak diversification

The 3 months correlation between SGS and Partners is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding SGS SA and Partners Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partners Group and SGS 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 SGS SA are associated (or correlated) with Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partners Group has no effect on the direction of SGS SA i.e., SGS SA and Partners go up and down completely randomly.

Pair Corralation between SGS SA and Partners

Assuming the 90 days horizon SGS SA is expected to generate 2.32 times less return on investment than Partners. But when comparing it to its historical volatility, SGS SA is 2.08 times less risky than Partners. It trades about 0.11 of its potential returns per unit of risk. Partners Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  121,314  in Partners Group on May 1, 2025 and sell it today you would earn a total of  19,286  from holding Partners Group or generate 15.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

SGS SA  vs.  Partners Group

SGS SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SGS SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, SGS SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Partners Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Partners Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Partners reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SGS SA and Partners

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

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