Correlation Between Echo Investment and Grupa KTY
Can any of the company-specific risk be diversified away by investing in both Echo Investment and Grupa KTY 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 Grupa KTY 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 Grupa KTY SA, you can compare the effects of market volatilities on Echo Investment and Grupa KTY 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 Grupa KTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echo Investment and Grupa KTY.
Diversification Opportunities for Echo Investment and Grupa KTY
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Echo and Grupa is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Echo Investment SA and Grupa KTY SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupa KTY 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 Grupa KTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupa KTY SA has no effect on the direction of Echo Investment i.e., Echo Investment and Grupa KTY go up and down completely randomly.
Pair Corralation between Echo Investment and Grupa KTY
Assuming the 90 days trading horizon Echo Investment SA is expected to generate 0.87 times more return on investment than Grupa KTY. However, Echo Investment SA is 1.15 times less risky than Grupa KTY. It trades about 0.13 of its potential returns per unit of risk. Grupa KTY SA is currently generating about -0.05 per unit of risk. If you would invest 417.00 in Echo Investment SA on September 12, 2024 and sell it today you would earn a total of 68.00 from holding Echo Investment SA or generate 16.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Echo Investment SA vs. Grupa KTY SA
Performance |
| Timeline |
| Echo Investment SA |
| Grupa KTY SA |
Echo Investment and Grupa KTY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echo Investment and Grupa KTY
The main advantage of trading using opposite Echo Investment and Grupa KTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echo Investment position performs unexpectedly, Grupa KTY 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 Grupa KTY will offset losses from the drop in Grupa KTY's long position.| Echo Investment vs. GreenX Metals | Echo Investment vs. Saule Technologies SA | Echo Investment vs. PZ Cormay SA | Echo Investment vs. Medicalg |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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