Correlation Between Aubay Socit and Esker SA
Can any of the company-specific risk be diversified away by investing in both Aubay Socit and Esker 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 Aubay Socit and Esker SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aubay Socit Anonyme and Esker SA, you can compare the effects of market volatilities on Aubay Socit and Esker 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 Aubay Socit with a short position of Esker SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aubay Socit and Esker SA.
Diversification Opportunities for Aubay Socit and Esker SA
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aubay and Esker is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aubay Socit Anonyme and Esker SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esker SA and Aubay Socit 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 Aubay Socit Anonyme are associated (or correlated) with Esker SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esker SA has no effect on the direction of Aubay Socit i.e., Aubay Socit and Esker SA go up and down completely randomly.
Pair Corralation between Aubay Socit and Esker SA
Assuming the 90 days trading horizon Aubay Socit is expected to generate 8.58 times less return on investment than Esker SA. But when comparing it to its historical volatility, Aubay Socit Anonyme is 1.2 times less risky than Esker SA. It trades about 0.02 of its potential returns per unit of risk. Esker SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 19,180 in Esker SA on September 1, 2024 and sell it today you would earn a total of 6,880 from holding Esker SA or generate 35.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.24% |
| Values | Daily Returns |
Aubay Socit Anonyme vs. Esker SA
Performance |
| Timeline |
| Aubay Socit Anonyme |
| Esker SA |
Aubay Socit and Esker SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aubay Socit and Esker SA
The main advantage of trading using opposite Aubay Socit and Esker SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aubay Socit position performs unexpectedly, Esker 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 Esker SA will offset losses from the drop in Esker SA's long position.| Aubay Socit vs. Neurones | Aubay Socit vs. Infotel SA | Aubay Socit vs. Alten SA | Aubay Socit vs. Wavestone SA |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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