Correlation Between Eutelsat Communications and Courtois
Can any of the company-specific risk be diversified away by investing in both Eutelsat Communications and Courtois 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 Courtois 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 Courtois SA, you can compare the effects of market volatilities on Eutelsat Communications and Courtois 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 Courtois. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eutelsat Communications and Courtois.
Diversification Opportunities for Eutelsat Communications and Courtois
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eutelsat and Courtois is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Eutelsat Communications SA and Courtois SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Courtois SA 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 Courtois. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Courtois SA has no effect on the direction of Eutelsat Communications i.e., Eutelsat Communications and Courtois go up and down completely randomly.
Pair Corralation between Eutelsat Communications and Courtois
Assuming the 90 days trading horizon Eutelsat Communications SA is expected to under-perform the Courtois. In addition to that, Eutelsat Communications is 1.83 times more volatile than Courtois SA. It trades about -0.22 of its total potential returns per unit of risk. Courtois SA is currently generating about 0.12 per unit of volatility. If you would invest 11,500 in Courtois SA on September 13, 2024 and sell it today you would earn a total of 500.00 from holding Courtois SA or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eutelsat Communications SA vs. Courtois SA
Performance |
| Timeline |
| Eutelsat Communications |
| Courtois SA |
Eutelsat Communications and Courtois Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eutelsat Communications and Courtois
The main advantage of trading using opposite Eutelsat Communications and Courtois positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eutelsat Communications position performs unexpectedly, Courtois 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 Courtois will offset losses from the drop in Courtois' long position.| Eutelsat Communications vs. SES S A | Eutelsat Communications vs. Rubis SCA | Eutelsat Communications vs. Coface SA | Eutelsat Communications vs. SCOR SE |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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