Correlation Between Europlasma and Granite 3x
Can any of the company-specific risk be diversified away by investing in both Europlasma and Granite 3x 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 Europlasma and Granite 3x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europlasma SA and Granite 3x LVMH, you can compare the effects of market volatilities on Europlasma and Granite 3x 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 Europlasma with a short position of Granite 3x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europlasma and Granite 3x.
Diversification Opportunities for Europlasma and Granite 3x
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Europlasma and Granite is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Europlasma SA and Granite 3x LVMH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite 3x LVMH and Europlasma 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 Europlasma SA are associated (or correlated) with Granite 3x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite 3x LVMH has no effect on the direction of Europlasma i.e., Europlasma and Granite 3x go up and down completely randomly.
Pair Corralation between Europlasma and Granite 3x
Assuming the 90 days trading horizon Europlasma SA is expected to under-perform the Granite 3x. In addition to that, Europlasma is 4.37 times more volatile than Granite 3x LVMH. It trades about -0.02 of its total potential returns per unit of risk. Granite 3x LVMH is currently generating about -0.07 per unit of volatility. If you would invest 759.00 in Granite 3x LVMH on September 12, 2024 and sell it today you would lose (601.00) from holding Granite 3x LVMH or give up 79.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 68.44% |
| Values | Daily Returns |
Europlasma SA vs. Granite 3x LVMH
Performance |
| Timeline |
| Europlasma SA |
| Granite 3x LVMH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Europlasma and Granite 3x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europlasma and Granite 3x
The main advantage of trading using opposite Europlasma and Granite 3x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europlasma position performs unexpectedly, Granite 3x 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 Granite 3x will offset losses from the drop in Granite 3x's long position.| Europlasma vs. Thermador Groupe SA | Europlasma vs. Samse SA | Europlasma vs. Rubis SCA | Europlasma vs. Trigano 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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