Correlation Between Arkema SA and Eurofins Scientific
Can any of the company-specific risk be diversified away by investing in both Arkema SA and Eurofins Scientific 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 Eurofins Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arkema SA and Eurofins Scientific SE, you can compare the effects of market volatilities on Arkema SA and Eurofins Scientific 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 Eurofins Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arkema SA and Eurofins Scientific.
Diversification Opportunities for Arkema SA and Eurofins Scientific
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arkema and Eurofins is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Arkema SA and Eurofins Scientific SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurofins Scientific 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 Eurofins Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurofins Scientific has no effect on the direction of Arkema SA i.e., Arkema SA and Eurofins Scientific go up and down completely randomly.
Pair Corralation between Arkema SA and Eurofins Scientific
Assuming the 90 days trading horizon Arkema SA is expected to under-perform the Eurofins Scientific. But the stock apears to be less risky and, when comparing its historical volatility, Arkema SA is 1.3 times less risky than Eurofins Scientific. The stock trades about -0.03 of its potential returns per unit of risk. The Eurofins Scientific SE is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 5,454 in Eurofins Scientific SE on September 2, 2024 and sell it today you would lose (775.00) from holding Eurofins Scientific SE or give up 14.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arkema SA vs. Eurofins Scientific SE
Performance |
| Timeline |
| Arkema SA |
| Eurofins Scientific |
Arkema SA and Eurofins Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arkema SA and Eurofins Scientific
The main advantage of trading using opposite Arkema SA and Eurofins Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arkema SA position performs unexpectedly, Eurofins Scientific 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 Eurofins Scientific will offset losses from the drop in Eurofins Scientific's long position.| Arkema SA vs. Voltalia SA | Arkema SA vs. Ecoslops SA | Arkema SA vs. Agripower France Sa | Arkema SA vs. Enertime SAS |
| Eurofins Scientific vs. Medincell SA | Eurofins Scientific vs. Lexibook Linguistic Electronic | Eurofins Scientific vs. Sensorion SA | Eurofins Scientific vs. Manitou BF SA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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