Correlation Between Arkema SA and Encres Dubuit
Can any of the company-specific risk be diversified away by investing in both Arkema SA and Encres Dubuit 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 Arkema SA and Encres Dubuit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arkema SA and Encres Dubuit SA, you can compare the effects of market volatilities on Arkema SA and Encres Dubuit 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 Arkema SA with a short position of Encres Dubuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arkema SA and Encres Dubuit.
Diversification Opportunities for Arkema SA and Encres Dubuit
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arkema and Encres is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Arkema SA and Encres Dubuit SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encres Dubuit SA and Arkema 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 Arkema SA are associated (or correlated) with Encres Dubuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encres Dubuit SA has no effect on the direction of Arkema SA i.e., Arkema SA and Encres Dubuit go up and down completely randomly.
Pair Corralation between Arkema SA and Encres Dubuit
Assuming the 90 days trading horizon Arkema SA is expected to generate 0.63 times more return on investment than Encres Dubuit. However, Arkema SA is 1.59 times less risky than Encres Dubuit. It trades about -0.01 of its potential returns per unit of risk. Encres Dubuit SA is currently generating about -0.02 per unit of risk. If you would invest 8,225 in Arkema SA on August 31, 2024 and sell it today you would lose (725.00) from holding Arkema SA or give up 8.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Arkema SA vs. Encres Dubuit SA
Performance |
| Timeline |
| Arkema SA |
| Encres Dubuit SA |
Arkema SA and Encres Dubuit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arkema SA and Encres Dubuit
The main advantage of trading using opposite Arkema SA and Encres Dubuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arkema SA position performs unexpectedly, Encres Dubuit 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 Encres Dubuit will offset losses from the drop in Encres Dubuit's long position.| Arkema SA vs. Legrand SA | Arkema SA vs. Eiffage SA | Arkema SA vs. Imerys SA | Arkema SA vs. Bureau Veritas SA |
| Encres Dubuit vs. Passat Socit Anonyme | Encres Dubuit vs. Gevelot | Encres Dubuit vs. Groupe Partouche SA | Encres Dubuit vs. EPC Groupe |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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