Correlation Between Eutelsat Communications and Elior SCA
Can any of the company-specific risk be diversified away by investing in both Eutelsat Communications and Elior SCA 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 Elior SCA 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 Elior SCA, you can compare the effects of market volatilities on Eutelsat Communications and Elior SCA 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 Elior SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eutelsat Communications and Elior SCA.
Diversification Opportunities for Eutelsat Communications and Elior SCA
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eutelsat and Elior is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Eutelsat Communications SA and Elior SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elior SCA 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 Elior SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elior SCA has no effect on the direction of Eutelsat Communications i.e., Eutelsat Communications and Elior SCA go up and down completely randomly.
Pair Corralation between Eutelsat Communications and Elior SCA
Assuming the 90 days trading horizon Eutelsat Communications SA is expected to generate 0.46 times more return on investment than Elior SCA. However, Eutelsat Communications SA is 2.18 times less risky than Elior SCA. It trades about -0.39 of its potential returns per unit of risk. Elior SCA is currently generating about -0.35 per unit of risk. If you would invest 373.00 in Eutelsat Communications SA on August 30, 2024 and sell it today you would lose (80.00) from holding Eutelsat Communications SA or give up 21.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eutelsat Communications SA vs. Elior SCA
Performance |
| Timeline |
| Eutelsat Communications |
| Elior SCA |
Eutelsat Communications and Elior SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eutelsat Communications and Elior SCA
The main advantage of trading using opposite Eutelsat Communications and Elior SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eutelsat Communications position performs unexpectedly, Elior SCA 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 Elior SCA will offset losses from the drop in Elior SCA's 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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