Correlation Between Europlasma and Groupe JAJ
Can any of the company-specific risk be diversified away by investing in both Europlasma and Groupe JAJ 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 Groupe JAJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europlasma SA and Groupe JAJ, you can compare the effects of market volatilities on Europlasma and Groupe JAJ 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 Groupe JAJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europlasma and Groupe JAJ.
Diversification Opportunities for Europlasma and Groupe JAJ
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Europlasma and Groupe is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Europlasma SA and Groupe JAJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe JAJ 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 Groupe JAJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe JAJ has no effect on the direction of Europlasma i.e., Europlasma and Groupe JAJ go up and down completely randomly.
Pair Corralation between Europlasma and Groupe JAJ
Assuming the 90 days trading horizon Europlasma SA is expected to under-perform the Groupe JAJ. But the stock apears to be less risky and, when comparing its historical volatility, Europlasma SA is 1.13 times less risky than Groupe JAJ. The stock trades about -0.82 of its potential returns per unit of risk. The Groupe JAJ is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 105.00 in Groupe JAJ on August 27, 2024 and sell it today you would earn a total of 2.00 from holding Groupe JAJ or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europlasma SA vs. Groupe JAJ
Performance |
| Timeline |
| Europlasma SA |
| Groupe JAJ |
Europlasma and Groupe JAJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europlasma and Groupe JAJ
The main advantage of trading using opposite Europlasma and Groupe JAJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europlasma position performs unexpectedly, Groupe JAJ 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 Groupe JAJ will offset losses from the drop in Groupe JAJ's long position.| Europlasma vs. Prodways Group SA | Europlasma vs. Claranova SE | Europlasma vs. DBV Technologies SA | Europlasma vs. Manitou BF SA |
| Groupe JAJ vs. BigBen Interactive | Groupe JAJ vs. Centrale dAchat Franaise | Groupe JAJ vs. Manitou BF SA | Groupe JAJ 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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