Correlation Between Econocom Group and Jensen
Can any of the company-specific risk be diversified away by investing in both Econocom Group and Jensen 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 Econocom Group and Jensen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Econocom Group SANV and Jensen Group, you can compare the effects of market volatilities on Econocom Group and Jensen 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 Econocom Group with a short position of Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Econocom Group and Jensen.
Diversification Opportunities for Econocom Group and Jensen
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Econocom and Jensen is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Econocom Group SANV and Jensen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Group and Econocom 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 Econocom Group SANV are associated (or correlated) with Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Group has no effect on the direction of Econocom Group i.e., Econocom Group and Jensen go up and down completely randomly.
Pair Corralation between Econocom Group and Jensen
Assuming the 90 days trading horizon Econocom Group SANV is expected to generate 0.57 times more return on investment than Jensen. However, Econocom Group SANV is 1.75 times less risky than Jensen. It trades about 0.14 of its potential returns per unit of risk. Jensen Group is currently generating about 0.0 per unit of risk. If you would invest 197.00 in Econocom Group SANV on August 26, 2024 and sell it today you would earn a total of 7.00 from holding Econocom Group SANV or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Econocom Group SANV vs. Jensen Group
Performance |
| Timeline |
| Econocom Group SANV |
| Jensen Group |
Econocom Group and Jensen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Econocom Group and Jensen
The main advantage of trading using opposite Econocom Group and Jensen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Econocom Group position performs unexpectedly, Jensen 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 Jensen will offset losses from the drop in Jensen's long position.| Econocom Group vs. Crescent NV | Econocom Group vs. Ion Beam Applications | Econocom Group vs. Nyrstar NV | Econocom Group vs. AGFA Gevaert NV |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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