Correlation Between Echo Investment and Apator SA
Can any of the company-specific risk be diversified away by investing in both Echo Investment and Apator 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 Echo Investment and Apator SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Echo Investment SA and Apator SA, you can compare the effects of market volatilities on Echo Investment and Apator 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 Echo Investment with a short position of Apator SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echo Investment and Apator SA.
Diversification Opportunities for Echo Investment and Apator SA
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Echo and Apator is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Echo Investment SA and Apator SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apator SA and Echo Investment 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 Echo Investment SA are associated (or correlated) with Apator SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apator SA has no effect on the direction of Echo Investment i.e., Echo Investment and Apator SA go up and down completely randomly.
Pair Corralation between Echo Investment and Apator SA
Assuming the 90 days trading horizon Echo Investment SA is expected to generate 1.1 times more return on investment than Apator SA. However, Echo Investment is 1.1 times more volatile than Apator SA. It trades about -0.08 of its potential returns per unit of risk. Apator SA is currently generating about -0.23 per unit of risk. If you would invest 458.00 in Echo Investment SA on August 29, 2024 and sell it today you would lose (13.00) from holding Echo Investment SA or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Echo Investment SA vs. Apator SA
Performance |
| Timeline |
| Echo Investment SA |
| Apator SA |
Echo Investment and Apator SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echo Investment and Apator SA
The main advantage of trading using opposite Echo Investment and Apator SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echo Investment position performs unexpectedly, Apator 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 Apator SA will offset losses from the drop in Apator SA's long position.| Echo Investment vs. Asseco Business Solutions | Echo Investment vs. Detalion Games SA | Echo Investment vs. CFI Holding SA | Echo Investment vs. HM Inwest SA |
| Apator SA vs. Asseco Business Solutions | Apator SA vs. Detalion Games SA | Apator SA vs. Asseco South Eastern | Apator SA vs. Vercom 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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