Correlation Between Ekinops SA and Wendel
Can any of the company-specific risk be diversified away by investing in both Ekinops SA and Wendel 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 Wendel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ekinops SA and Wendel, you can compare the effects of market volatilities on Ekinops SA and Wendel 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 Wendel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekinops SA and Wendel.
Diversification Opportunities for Ekinops SA and Wendel
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ekinops and Wendel is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ekinops SA and Wendel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wendel 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 Wendel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wendel has no effect on the direction of Ekinops SA i.e., Ekinops SA and Wendel go up and down completely randomly.
Pair Corralation between Ekinops SA and Wendel
Assuming the 90 days trading horizon Ekinops SA is expected to under-perform the Wendel. In addition to that, Ekinops SA is 2.36 times more volatile than Wendel. It trades about -0.05 of its total potential returns per unit of risk. Wendel is currently generating about 0.02 per unit of volatility. If you would invest 8,819 in Wendel on August 28, 2024 and sell it today you would earn a total of 606.00 from holding Wendel or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ekinops SA vs. Wendel
Performance |
| Timeline |
| Ekinops SA |
| Wendel |
Ekinops SA and Wendel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ekinops SA and Wendel
The main advantage of trading using opposite Ekinops SA and Wendel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ekinops SA position performs unexpectedly, Wendel 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 Wendel will offset losses from the drop in Wendel's long position.| Ekinops SA vs. Claranova SE | Ekinops SA vs. Derichebourg | Ekinops SA vs. Mersen SA | Ekinops SA vs. BigBen Interactive |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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