Correlation Between Esker SA and Melexis NV
Can any of the company-specific risk be diversified away by investing in both Esker SA and Melexis NV 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 Esker SA and Melexis NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esker SA and Melexis NV, you can compare the effects of market volatilities on Esker SA and Melexis NV 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 Esker SA with a short position of Melexis NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esker SA and Melexis NV.
Diversification Opportunities for Esker SA and Melexis NV
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Esker and Melexis is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Esker SA and Melexis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melexis NV and Esker 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 Esker SA are associated (or correlated) with Melexis NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melexis NV has no effect on the direction of Esker SA i.e., Esker SA and Melexis NV go up and down completely randomly.
Pair Corralation between Esker SA and Melexis NV
Assuming the 90 days trading horizon Esker SA is expected to generate 0.1 times more return on investment than Melexis NV. However, Esker SA is 10.3 times less risky than Melexis NV. It trades about -0.13 of its potential returns per unit of risk. Melexis NV is currently generating about -0.02 per unit of risk. If you would invest 26,140 in Esker SA on September 12, 2024 and sell it today you would lose (140.00) from holding Esker SA or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esker SA vs. Melexis NV
Performance |
| Timeline |
| Esker SA |
| Melexis NV |
Esker SA and Melexis NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esker SA and Melexis NV
The main advantage of trading using opposite Esker SA and Melexis NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esker SA position performs unexpectedly, Melexis NV 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 Melexis NV will offset losses from the drop in Melexis NV's long position.| Esker SA vs. Groupe Guillin SA | Esker SA vs. Stef SA | Esker SA vs. SA Catana Group | Esker SA vs. Jacquet Metal Service |
| Melexis NV vs. Ackermans Van Haaren | Melexis NV vs. Sofina Socit Anonyme | Melexis NV vs. ageas SANV | Melexis NV vs. Barco NV |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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