Correlation Between Eurobio Scientific and Netgem SA
Can any of the company-specific risk be diversified away by investing in both Eurobio Scientific and Netgem 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 Eurobio Scientific and Netgem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurobio Scientific SA and Netgem SA, you can compare the effects of market volatilities on Eurobio Scientific and Netgem 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 Eurobio Scientific with a short position of Netgem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobio Scientific and Netgem SA.
Diversification Opportunities for Eurobio Scientific and Netgem SA
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eurobio and Netgem is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Eurobio Scientific SA and Netgem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netgem SA and Eurobio Scientific 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 Eurobio Scientific SA are associated (or correlated) with Netgem SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netgem SA has no effect on the direction of Eurobio Scientific i.e., Eurobio Scientific and Netgem SA go up and down completely randomly.
Pair Corralation between Eurobio Scientific and Netgem SA
Assuming the 90 days trading horizon Eurobio Scientific SA is expected to generate 0.19 times more return on investment than Netgem SA. However, Eurobio Scientific SA is 5.16 times less risky than Netgem SA. It trades about -0.12 of its potential returns per unit of risk. Netgem SA is currently generating about -0.03 per unit of risk. If you would invest 2,590 in Eurobio Scientific SA on August 31, 2024 and sell it today you would lose (30.00) from holding Eurobio Scientific SA or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eurobio Scientific SA vs. Netgem SA
Performance |
| Timeline |
| Eurobio Scientific |
| Netgem SA |
Eurobio Scientific and Netgem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurobio Scientific and Netgem SA
The main advantage of trading using opposite Eurobio Scientific and Netgem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobio Scientific position performs unexpectedly, Netgem 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 Netgem SA will offset losses from the drop in Netgem SA's long position.| Eurobio Scientific vs. Biosynex | Eurobio Scientific vs. Novacyt | Eurobio Scientific vs. Biophytis SA | Eurobio Scientific vs. Intrasense |
| Netgem SA vs. Eurobio Scientific SA | Netgem SA vs. Riber SA | Netgem SA vs. Manitou BF SA | Netgem SA vs. Ossiam Minimum Variance |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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