Correlation Between Eutelsat Communications and Acticor Biotech
Can any of the company-specific risk be diversified away by investing in both Eutelsat Communications and Acticor Biotech 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 Eutelsat Communications and Acticor Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eutelsat Communications SA and Acticor Biotech SAS, you can compare the effects of market volatilities on Eutelsat Communications and Acticor Biotech 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 Eutelsat Communications with a short position of Acticor Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eutelsat Communications and Acticor Biotech.
Diversification Opportunities for Eutelsat Communications and Acticor Biotech
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eutelsat and Acticor is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Eutelsat Communications SA and Acticor Biotech SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acticor Biotech SAS and Eutelsat Communications 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 Eutelsat Communications SA are associated (or correlated) with Acticor Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acticor Biotech SAS has no effect on the direction of Eutelsat Communications i.e., Eutelsat Communications and Acticor Biotech go up and down completely randomly.
Pair Corralation between Eutelsat Communications and Acticor Biotech
Assuming the 90 days trading horizon Eutelsat Communications SA is expected to generate 0.74 times more return on investment than Acticor Biotech. However, Eutelsat Communications SA is 1.35 times less risky than Acticor Biotech. It trades about -0.19 of its potential returns per unit of risk. Acticor Biotech SAS is currently generating about -0.27 per unit of risk. If you would invest 360.00 in Eutelsat Communications SA on September 14, 2024 and sell it today you would lose (48.00) from holding Eutelsat Communications SA or give up 13.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eutelsat Communications SA vs. Acticor Biotech SAS
Performance |
| Timeline |
| Eutelsat Communications |
| Acticor Biotech SAS |
Eutelsat Communications and Acticor Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eutelsat Communications and Acticor Biotech
The main advantage of trading using opposite Eutelsat Communications and Acticor Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eutelsat Communications position performs unexpectedly, Acticor Biotech 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 Acticor Biotech will offset losses from the drop in Acticor Biotech's long position.| Eutelsat Communications vs. Rubis SCA | Eutelsat Communications vs. Coface SA | Eutelsat Communications vs. SCOR SE | Eutelsat Communications vs. Nexity |
| Acticor Biotech vs. Eutelsat Communications SA | Acticor Biotech vs. Fiducial Office Solutions | Acticor Biotech vs. Pullup Entertainment Socit | Acticor Biotech vs. Mediantechn |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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