Correlation Between Europris ASA and Elopak AS
Can any of the company-specific risk be diversified away by investing in both Europris ASA and Elopak AS 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 Europris ASA and Elopak AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europris ASA and Elopak AS, you can compare the effects of market volatilities on Europris ASA and Elopak AS 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 Europris ASA with a short position of Elopak AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europris ASA and Elopak AS.
Diversification Opportunities for Europris ASA and Elopak AS
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Europris and Elopak is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Europris ASA and Elopak AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elopak AS and Europris ASA 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 Europris ASA are associated (or correlated) with Elopak AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elopak AS has no effect on the direction of Europris ASA i.e., Europris ASA and Elopak AS go up and down completely randomly.
Pair Corralation between Europris ASA and Elopak AS
Assuming the 90 days trading horizon Europris ASA is expected to under-perform the Elopak AS. But the stock apears to be less risky and, when comparing its historical volatility, Europris ASA is 1.02 times less risky than Elopak AS. The stock trades about -0.09 of its potential returns per unit of risk. The Elopak AS is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 4,455 in Elopak AS on September 1, 2024 and sell it today you would lose (60.00) from holding Elopak AS or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europris ASA vs. Elopak AS
Performance |
| Timeline |
| Europris ASA |
| Elopak AS |
Europris ASA and Elopak AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europris ASA and Elopak AS
The main advantage of trading using opposite Europris ASA and Elopak AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europris ASA position performs unexpectedly, Elopak AS 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 Elopak AS will offset losses from the drop in Elopak AS's long position.| Europris ASA vs. Storebrand ASA | Europris ASA vs. XXL ASA | Europris ASA vs. Orkla ASA | Europris ASA vs. DnB ASA |
| Elopak AS vs. Elkem ASA | Elopak AS vs. Norske Skog Asa | Elopak AS vs. Kitron ASA | Elopak AS vs. Europris ASA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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