Correlation Between Eternit SA and Lupatech
Can any of the company-specific risk be diversified away by investing in both Eternit SA and Lupatech 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 Eternit SA and Lupatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eternit SA and Lupatech SA, you can compare the effects of market volatilities on Eternit SA and Lupatech 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 Eternit SA with a short position of Lupatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eternit SA and Lupatech.
Diversification Opportunities for Eternit SA and Lupatech
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eternit and Lupatech is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Eternit SA and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA and Eternit 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 Eternit SA are associated (or correlated) with Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of Eternit SA i.e., Eternit SA and Lupatech go up and down completely randomly.
Pair Corralation between Eternit SA and Lupatech
Assuming the 90 days trading horizon Eternit SA is expected to generate 0.86 times more return on investment than Lupatech. However, Eternit SA is 1.16 times less risky than Lupatech. It trades about 0.01 of its potential returns per unit of risk. Lupatech SA is currently generating about -0.28 per unit of risk. If you would invest 525.00 in Eternit SA on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Eternit SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Eternit SA vs. Lupatech SA
Performance |
| Timeline |
| Eternit SA |
| Lupatech SA |
Eternit SA and Lupatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eternit SA and Lupatech
The main advantage of trading using opposite Eternit SA and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eternit SA position performs unexpectedly, Lupatech 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 Lupatech will offset losses from the drop in Lupatech's long position.| Eternit SA vs. Marcopolo SA | Eternit SA vs. Randon SA Implementos | Eternit SA vs. Companhia Siderrgica Nacional | Eternit SA vs. Positivo Tecnologia SA |
| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Eternit 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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