Correlation Between Ekter SA and Mevaco SA
Can any of the company-specific risk be diversified away by investing in both Ekter SA and Mevaco SA 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 Ekter SA and Mevaco SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ekter SA and Mevaco SA, you can compare the effects of market volatilities on Ekter SA and Mevaco SA 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 Ekter SA with a short position of Mevaco SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekter SA and Mevaco SA.
Diversification Opportunities for Ekter SA and Mevaco SA
Poor diversification
The 3 months correlation between Ekter and Mevaco is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ekter SA and Mevaco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mevaco SA and Ekter 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 Ekter SA are associated (or correlated) with Mevaco SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mevaco SA has no effect on the direction of Ekter SA i.e., Ekter SA and Mevaco SA go up and down completely randomly.
Pair Corralation between Ekter SA and Mevaco SA
Assuming the 90 days trading horizon Ekter SA is expected to generate 2.01 times more return on investment than Mevaco SA. However, Ekter SA is 2.01 times more volatile than Mevaco SA. It trades about 0.03 of its potential returns per unit of risk. Mevaco SA is currently generating about 0.05 per unit of risk. If you would invest 128.00 in Ekter SA on September 2, 2024 and sell it today you would earn a total of 22.00 from holding Ekter SA or generate 17.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ekter SA vs. Mevaco SA
Performance |
| Timeline |
| Ekter SA |
| Mevaco SA |
Ekter SA and Mevaco SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ekter SA and Mevaco SA
The main advantage of trading using opposite Ekter SA and Mevaco SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ekter SA position performs unexpectedly, Mevaco SA 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 Mevaco SA will offset losses from the drop in Mevaco SA's long position.| Ekter SA vs. Mytilineos SA | Ekter SA vs. Terna Energy Societe | Ekter SA vs. Greek Organization of | Ekter SA vs. Motor Oil Corinth |
| Mevaco SA vs. As Commercial Industrial | Mevaco SA vs. BriQ Properties Real | Mevaco SA vs. Centric Holdings SA | Mevaco SA vs. Ekter SA |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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