Correlation Between Agrogeneration and Europlasma
Can any of the company-specific risk be diversified away by investing in both Agrogeneration and Europlasma 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 Agrogeneration and Europlasma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrogeneration and Europlasma SA, you can compare the effects of market volatilities on Agrogeneration and Europlasma 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 Agrogeneration with a short position of Europlasma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrogeneration and Europlasma.
Diversification Opportunities for Agrogeneration and Europlasma
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agrogeneration and Europlasma is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Agrogeneration and Europlasma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europlasma SA and Agrogeneration 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 Agrogeneration are associated (or correlated) with Europlasma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europlasma SA has no effect on the direction of Agrogeneration i.e., Agrogeneration and Europlasma go up and down completely randomly.
Pair Corralation between Agrogeneration and Europlasma
Assuming the 90 days trading horizon Agrogeneration is expected to under-perform the Europlasma. But the stock apears to be less risky and, when comparing its historical volatility, Agrogeneration is 5.67 times less risky than Europlasma. The stock trades about -0.19 of its potential returns per unit of risk. The Europlasma SA is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 7.09 in Europlasma SA on August 30, 2024 and sell it today you would earn a total of 4.91 from holding Europlasma SA or generate 69.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agrogeneration vs. Europlasma SA
Performance |
| Timeline |
| Agrogeneration |
| Europlasma SA |
Agrogeneration and Europlasma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrogeneration and Europlasma
The main advantage of trading using opposite Agrogeneration and Europlasma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrogeneration position performs unexpectedly, Europlasma 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 Europlasma will offset losses from the drop in Europlasma's long position.| Agrogeneration vs. Acheter Louer | Agrogeneration vs. Avenir Telecom SA | Agrogeneration vs. DBT SA | Agrogeneration vs. Europlasma 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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