Correlation Between Eutelsat Communications and Hotelim Socit
Can any of the company-specific risk be diversified away by investing in both Eutelsat Communications and Hotelim Socit 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 Hotelim Socit 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 Hotelim Socit Anonyme, you can compare the effects of market volatilities on Eutelsat Communications and Hotelim Socit 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 Hotelim Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eutelsat Communications and Hotelim Socit.
Diversification Opportunities for Eutelsat Communications and Hotelim Socit
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eutelsat and Hotelim is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eutelsat Communications SA and Hotelim Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotelim Socit Anonyme 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 Hotelim Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotelim Socit Anonyme has no effect on the direction of Eutelsat Communications i.e., Eutelsat Communications and Hotelim Socit go up and down completely randomly.
Pair Corralation between Eutelsat Communications and Hotelim Socit
Assuming the 90 days trading horizon Eutelsat Communications SA is expected to under-perform the Hotelim Socit. But the stock apears to be less risky and, when comparing its historical volatility, Eutelsat Communications SA is 3.11 times less risky than Hotelim Socit. The stock trades about -0.06 of its potential returns per unit of risk. The Hotelim Socit Anonyme is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,880 in Hotelim Socit Anonyme on August 30, 2024 and sell it today you would earn a total of 1,060 from holding Hotelim Socit Anonyme or generate 36.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.45% |
| Values | Daily Returns |
Eutelsat Communications SA vs. Hotelim Socit Anonyme
Performance |
| Timeline |
| Eutelsat Communications |
| Hotelim Socit Anonyme |
Eutelsat Communications and Hotelim Socit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eutelsat Communications and Hotelim Socit
The main advantage of trading using opposite Eutelsat Communications and Hotelim Socit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eutelsat Communications position performs unexpectedly, Hotelim Socit 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 Hotelim Socit will offset losses from the drop in Hotelim Socit's long position.| Eutelsat Communications vs. SES S A | Eutelsat Communications vs. Rubis SCA | Eutelsat Communications vs. Coface SA | Eutelsat Communications vs. SCOR SE |
| Hotelim Socit vs. Accor S A | Hotelim Socit vs. Ferm Casino Mun | Hotelim Socit vs. Les Hotels Bav | Hotelim Socit vs. Socit Htelire et |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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