Correlation Between DIeteren Group and Ekopak BV

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Can any of the company-specific risk be diversified away by investing in both DIeteren Group and Ekopak BV 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 DIeteren Group and Ekopak BV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DIeteren Group SA and Ekopak BV, you can compare the effects of market volatilities on DIeteren Group and Ekopak BV 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 DIeteren Group with a short position of Ekopak BV. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIeteren Group and Ekopak BV.

Diversification Opportunities for DIeteren Group and Ekopak BV

-0.8
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between DIeteren and Ekopak is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding DIeteren Group SA and Ekopak BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekopak BV and DIeteren Group 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 DIeteren Group SA are associated (or correlated) with Ekopak BV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekopak BV has no effect on the direction of DIeteren Group i.e., DIeteren Group and Ekopak BV go up and down completely randomly.

Pair Corralation between DIeteren Group and Ekopak BV

Assuming the 90 days trading horizon DIeteren Group SA is expected to generate 1.07 times more return on investment than Ekopak BV. However, DIeteren Group is 1.07 times more volatile than Ekopak BV. It trades about 0.05 of its potential returns per unit of risk. Ekopak BV is currently generating about -0.02 per unit of risk. If you would invest  11,212  in DIeteren Group SA on November 9, 2024 and sell it today you would earn a total of  5,348  from holding DIeteren Group SA or generate 47.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

DIeteren Group SA  vs.  Ekopak BV

 Performance 
       Timeline  
DIeteren Group SA 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in DIeteren Group SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, DIeteren Group reported solid returns over the last few months and may actually be approaching a breakup point.
Ekopak BV 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ekopak BV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

DIeteren Group and Ekopak BV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DIeteren Group and Ekopak BV

The main advantage of trading using opposite DIeteren Group and Ekopak BV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIeteren Group position performs unexpectedly, Ekopak BV 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 Ekopak BV will offset losses from the drop in Ekopak BV's long position.
The idea behind DIeteren Group SA and Ekopak BV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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