Correlation Between Ekinops SA and Reworld Media
Can any of the company-specific risk be diversified away by investing in both Ekinops SA and Reworld Media 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 Ekinops SA and Reworld Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ekinops SA and Reworld Media, you can compare the effects of market volatilities on Ekinops SA and Reworld Media 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 Ekinops SA with a short position of Reworld Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekinops SA and Reworld Media.
Diversification Opportunities for Ekinops SA and Reworld Media
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ekinops and Reworld is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ekinops SA and Reworld Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reworld Media and Ekinops SA 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 Ekinops SA are associated (or correlated) with Reworld Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reworld Media has no effect on the direction of Ekinops SA i.e., Ekinops SA and Reworld Media go up and down completely randomly.
Pair Corralation between Ekinops SA and Reworld Media
Assuming the 90 days trading horizon Ekinops SA is expected to under-perform the Reworld Media. But the stock apears to be less risky and, when comparing its historical volatility, Ekinops SA is 1.37 times less risky than Reworld Media. The stock trades about -0.08 of its potential returns per unit of risk. The Reworld Media is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 149.00 in Reworld Media on November 27, 2024 and sell it today you would lose (5.00) from holding Reworld Media or give up 3.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ekinops SA vs. Reworld Media
Performance |
| Timeline |
| Ekinops SA |
| Reworld Media |
Ekinops SA and Reworld Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ekinops SA and Reworld Media
The main advantage of trading using opposite Ekinops SA and Reworld Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ekinops SA position performs unexpectedly, Reworld Media 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 Reworld Media will offset losses from the drop in Reworld Media's long position.| Ekinops SA vs. Claranova SE | Ekinops SA vs. Derichebourg | Ekinops SA vs. Mersen SA | Ekinops SA vs. BigBen Interactive |
| Reworld Media vs. ZCCM Investments Holdings | Reworld Media vs. Broadpeak SA | Reworld Media vs. Sogeclair SA | Reworld Media vs. Bilendi |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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