Correlation Between Eutelsat Communications and Hitechpros
Can any of the company-specific risk be diversified away by investing in both Eutelsat Communications and Hitechpros 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 Hitechpros 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 Hitechpros, you can compare the effects of market volatilities on Eutelsat Communications and Hitechpros 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 Hitechpros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eutelsat Communications and Hitechpros.
Diversification Opportunities for Eutelsat Communications and Hitechpros
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eutelsat and Hitechpros is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Eutelsat Communications SA and Hitechpros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitechpros 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 Hitechpros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitechpros has no effect on the direction of Eutelsat Communications i.e., Eutelsat Communications and Hitechpros go up and down completely randomly.
Pair Corralation between Eutelsat Communications and Hitechpros
Assuming the 90 days trading horizon Eutelsat Communications SA is expected to under-perform the Hitechpros. In addition to that, Eutelsat Communications is 1.39 times more volatile than Hitechpros. It trades about -0.47 of its total potential returns per unit of risk. Hitechpros is currently generating about -0.11 per unit of volatility. If you would invest 1,630 in Hitechpros on September 1, 2024 and sell it today you would lose (80.00) from holding Hitechpros or give up 4.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eutelsat Communications SA vs. Hitechpros
Performance |
| Timeline |
| Eutelsat Communications |
| Hitechpros |
Eutelsat Communications and Hitechpros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eutelsat Communications and Hitechpros
The main advantage of trading using opposite Eutelsat Communications and Hitechpros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eutelsat Communications position performs unexpectedly, Hitechpros 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 Hitechpros will offset losses from the drop in Hitechpros' long position.| Eutelsat Communications vs. SES S A | Eutelsat Communications vs. Rubis SCA | Eutelsat Communications vs. Coface SA | Eutelsat Communications vs. SCOR SE |
| Hitechpros vs. Groupe Guillin SA | Hitechpros vs. Infotel SA | Hitechpros vs. Linedata Services SA | Hitechpros vs. Aubay Socit Anonyme |
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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