Correlation Between GRUPO ECOENER and COFACE SA
Can any of the company-specific risk be diversified away by investing in both GRUPO ECOENER and COFACE 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 GRUPO ECOENER and COFACE SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRUPO ECOENER EO and COFACE SA, you can compare the effects of market volatilities on GRUPO ECOENER and COFACE 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 GRUPO ECOENER with a short position of COFACE SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO ECOENER and COFACE SA.
Diversification Opportunities for GRUPO ECOENER and COFACE SA
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GRUPO and COFACE is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO ECOENER EO and COFACE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFACE SA and GRUPO ECOENER 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 GRUPO ECOENER EO are associated (or correlated) with COFACE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFACE SA has no effect on the direction of GRUPO ECOENER i.e., GRUPO ECOENER and COFACE SA go up and down completely randomly.
Pair Corralation between GRUPO ECOENER and COFACE SA
Assuming the 90 days horizon GRUPO ECOENER is expected to generate 2.92 times less return on investment than COFACE SA. In addition to that, GRUPO ECOENER is 1.53 times more volatile than COFACE SA. It trades about 0.01 of its total potential returns per unit of risk. COFACE SA is currently generating about 0.05 per unit of volatility. If you would invest 1,011 in COFACE SA on October 12, 2024 and sell it today you would earn a total of 460.00 from holding COFACE SA or generate 45.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRUPO ECOENER EO vs. COFACE SA
Performance |
| Timeline |
| GRUPO ECOENER EO |
| COFACE SA |
GRUPO ECOENER and COFACE SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRUPO ECOENER and COFACE SA
The main advantage of trading using opposite GRUPO ECOENER and COFACE SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPO ECOENER position performs unexpectedly, COFACE 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 COFACE SA will offset losses from the drop in COFACE SA's long position.| GRUPO ECOENER vs. HANOVER INSURANCE | GRUPO ECOENER vs. MidCap Financial Investment | GRUPO ECOENER vs. ECHO INVESTMENT ZY | GRUPO ECOENER vs. Vienna Insurance Group |
| COFACE SA vs. AEGEAN AIRLINES | COFACE SA vs. Sixt Leasing SE | COFACE SA vs. Clean Energy Fuels | COFACE SA vs. International Consolidated Airlines |
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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