Correlation Between Plant Advanced and Europlasma
Can any of the company-specific risk be diversified away by investing in both Plant Advanced 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 Plant Advanced and Europlasma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plant Advanced Technologies and Europlasma SA, you can compare the effects of market volatilities on Plant Advanced 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 Plant Advanced with a short position of Europlasma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plant Advanced and Europlasma.
Diversification Opportunities for Plant Advanced and Europlasma
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Plant and Europlasma is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Plant Advanced Technologies and Europlasma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europlasma SA and Plant Advanced 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 Plant Advanced Technologies 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 Plant Advanced i.e., Plant Advanced and Europlasma go up and down completely randomly.
Pair Corralation between Plant Advanced and Europlasma
Assuming the 90 days trading horizon Plant Advanced Technologies is expected to generate 0.19 times more return on investment than Europlasma. However, Plant Advanced Technologies is 5.18 times less risky than Europlasma. It trades about -0.14 of its potential returns per unit of risk. Europlasma SA is currently generating about -0.61 per unit of risk. If you would invest 1,190 in Plant Advanced Technologies on November 6, 2024 and sell it today you would lose (40.00) from holding Plant Advanced Technologies or give up 3.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plant Advanced Technologies vs. Europlasma SA
Performance |
| Timeline |
| Plant Advanced Techn |
| Europlasma SA |
Plant Advanced and Europlasma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plant Advanced and Europlasma
The main advantage of trading using opposite Plant Advanced and Europlasma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plant Advanced 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.| Plant Advanced vs. Sensorion SA | Plant Advanced vs. Quantum Genomics SA | Plant Advanced vs. Valbiotis SAS | Plant Advanced vs. OSE Pharma 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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