Correlation Between Echo Investment and Stalexport Autostrady
Can any of the company-specific risk be diversified away by investing in both Echo Investment and Stalexport Autostrady 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 Stalexport Autostrady 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 Stalexport Autostrady SA, you can compare the effects of market volatilities on Echo Investment and Stalexport Autostrady 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 Stalexport Autostrady. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echo Investment and Stalexport Autostrady.
Diversification Opportunities for Echo Investment and Stalexport Autostrady
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Echo and Stalexport is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Echo Investment SA and Stalexport Autostrady SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stalexport Autostrady 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 Stalexport Autostrady. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stalexport Autostrady has no effect on the direction of Echo Investment i.e., Echo Investment and Stalexport Autostrady go up and down completely randomly.
Pair Corralation between Echo Investment and Stalexport Autostrady
Assuming the 90 days trading horizon Echo Investment SA is expected to generate 1.29 times more return on investment than Stalexport Autostrady. However, Echo Investment is 1.29 times more volatile than Stalexport Autostrady SA. It trades about 0.07 of its potential returns per unit of risk. Stalexport Autostrady SA is currently generating about 0.06 per unit of risk. If you would invest 294.00 in Echo Investment SA on September 13, 2024 and sell it today you would earn a total of 191.00 from holding Echo Investment SA or generate 64.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Echo Investment SA vs. Stalexport Autostrady SA
Performance |
| Timeline |
| Echo Investment SA |
| Stalexport Autostrady |
Echo Investment and Stalexport Autostrady Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echo Investment and Stalexport Autostrady
The main advantage of trading using opposite Echo Investment and Stalexport Autostrady positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echo Investment position performs unexpectedly, Stalexport Autostrady 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 Stalexport Autostrady will offset losses from the drop in Stalexport Autostrady's long position.| Echo Investment vs. GreenX Metals | Echo Investment vs. Saule Technologies SA | Echo Investment vs. PZ Cormay SA | Echo Investment vs. Medicalg |
| Stalexport Autostrady vs. ING Bank lski | Stalexport Autostrady vs. Echo Investment SA | Stalexport Autostrady vs. Alior Bank SA | Stalexport Autostrady vs. SOFTWARE MANSION SPOLKA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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