Correlation Between Esso SAF and OSE Pharma
Can any of the company-specific risk be diversified away by investing in both Esso SAF and OSE Pharma 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 Esso SAF and OSE Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esso SAF and OSE Pharma SA, you can compare the effects of market volatilities on Esso SAF and OSE Pharma 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 Esso SAF with a short position of OSE Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esso SAF and OSE Pharma.
Diversification Opportunities for Esso SAF and OSE Pharma
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Esso and OSE is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Esso SAF and OSE Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSE Pharma SA and Esso SAF 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 Esso SAF are associated (or correlated) with OSE Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSE Pharma SA has no effect on the direction of Esso SAF i.e., Esso SAF and OSE Pharma go up and down completely randomly.
Pair Corralation between Esso SAF and OSE Pharma
Assuming the 90 days horizon Esso SAF is expected to generate 0.56 times more return on investment than OSE Pharma. However, Esso SAF is 1.77 times less risky than OSE Pharma. It trades about 0.08 of its potential returns per unit of risk. OSE Pharma SA is currently generating about 0.02 per unit of risk. If you would invest 4,395 in Esso SAF on October 30, 2024 and sell it today you would earn a total of 6,745 from holding Esso SAF or generate 153.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Esso SAF vs. OSE Pharma SA
Performance |
| Timeline |
| Esso SAF |
| OSE Pharma SA |
Esso SAF and OSE Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esso SAF and OSE Pharma
The main advantage of trading using opposite Esso SAF and OSE Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esso SAF position performs unexpectedly, OSE Pharma 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 OSE Pharma will offset losses from the drop in OSE Pharma's long position.| Esso SAF vs. Etablissements Maurel et | Esso SAF vs. Eramet SA | Esso SAF vs. Socit BIC SA | Esso SAF vs. TotalEnergies EP Gabon |
| OSE Pharma vs. Innate Pharma | OSE Pharma vs. Quantum Genomics SA | OSE Pharma vs. Valneva SE | OSE Pharma vs. Poxel 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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