Correlation Between COFACE SA and Ecotel Communication
Can any of the company-specific risk be diversified away by investing in both COFACE SA and Ecotel Communication 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 COFACE SA and Ecotel Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFACE SA and ecotel communication ag, you can compare the effects of market volatilities on COFACE SA and Ecotel Communication 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 COFACE SA with a short position of Ecotel Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFACE SA and Ecotel Communication.
Diversification Opportunities for COFACE SA and Ecotel Communication
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COFACE and Ecotel is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding COFACE SA and ecotel communication ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ecotel communication and COFACE 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 COFACE SA are associated (or correlated) with Ecotel Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ecotel communication has no effect on the direction of COFACE SA i.e., COFACE SA and Ecotel Communication go up and down completely randomly.
Pair Corralation between COFACE SA and Ecotel Communication
Assuming the 90 days horizon COFACE SA is expected to generate 1.04 times more return on investment than Ecotel Communication. However, COFACE SA is 1.04 times more volatile than ecotel communication ag. It trades about 0.25 of its potential returns per unit of risk. ecotel communication ag is currently generating about -0.05 per unit of risk. If you would invest 1,395 in COFACE SA on October 13, 2024 and sell it today you would earn a total of 76.00 from holding COFACE SA or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFACE SA vs. ecotel communication ag
Performance |
| Timeline |
| COFACE SA |
| ecotel communication |
COFACE SA and Ecotel Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFACE SA and Ecotel Communication
The main advantage of trading using opposite COFACE SA and Ecotel Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFACE SA position performs unexpectedly, Ecotel Communication 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 Ecotel Communication will offset losses from the drop in Ecotel Communication's long position.| COFACE SA vs. ecotel communication ag | COFACE SA vs. COMBA TELECOM SYST | COFACE SA vs. TELECOM ITALIA | COFACE SA vs. Cairo Communication SpA |
| Ecotel Communication vs. TRI CHEMICAL LABORATINC | Ecotel Communication vs. Transport International Holdings | Ecotel Communication vs. X FAB Silicon Foundries | Ecotel Communication vs. Sekisui Chemical Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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