Correlation Between Echo Investment and Benefit Systems
Can any of the company-specific risk be diversified away by investing in both Echo Investment and Benefit Systems 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 Benefit Systems 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 Benefit Systems SA, you can compare the effects of market volatilities on Echo Investment and Benefit Systems 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 Benefit Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echo Investment and Benefit Systems.
Diversification Opportunities for Echo Investment and Benefit Systems
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Echo and Benefit is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Echo Investment SA and Benefit Systems SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benefit Systems 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 Benefit Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benefit Systems SA has no effect on the direction of Echo Investment i.e., Echo Investment and Benefit Systems go up and down completely randomly.
Pair Corralation between Echo Investment and Benefit Systems
Assuming the 90 days trading horizon Echo Investment is expected to generate 3.34 times less return on investment than Benefit Systems. But when comparing it to its historical volatility, Echo Investment SA is 1.16 times less risky than Benefit Systems. It trades about 0.14 of its potential returns per unit of risk. Benefit Systems SA is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 240,000 in Benefit Systems SA on September 13, 2024 and sell it today you would earn a total of 48,500 from holding Benefit Systems SA or generate 20.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Echo Investment SA vs. Benefit Systems SA
Performance |
| Timeline |
| Echo Investment SA |
| Benefit Systems SA |
Echo Investment and Benefit Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echo Investment and Benefit Systems
The main advantage of trading using opposite Echo Investment and Benefit Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echo Investment position performs unexpectedly, Benefit Systems 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 Benefit Systems will offset losses from the drop in Benefit Systems' long position.| Echo Investment vs. GreenX Metals | Echo Investment vs. Saule Technologies SA | Echo Investment vs. PZ Cormay SA | Echo Investment vs. Medicalg |
| Benefit Systems vs. Bank Millennium SA | Benefit Systems vs. PZ Cormay SA | Benefit Systems vs. ING Bank lski | Benefit Systems vs. Echo Investment 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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