Correlation Between EPC Groupe and Coil SANV
Can any of the company-specific risk be diversified away by investing in both EPC Groupe and Coil SANV 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 EPC Groupe and Coil SANV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPC Groupe and Coil SANV, you can compare the effects of market volatilities on EPC Groupe and Coil SANV 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 EPC Groupe with a short position of Coil SANV. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPC Groupe and Coil SANV.
Diversification Opportunities for EPC Groupe and Coil SANV
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EPC and Coil is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding EPC Groupe and Coil SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coil SANV and EPC Groupe 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 EPC Groupe are associated (or correlated) with Coil SANV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coil SANV has no effect on the direction of EPC Groupe i.e., EPC Groupe and Coil SANV go up and down completely randomly.
Pair Corralation between EPC Groupe and Coil SANV
Assuming the 90 days trading horizon EPC Groupe is expected to generate 0.36 times more return on investment than Coil SANV. However, EPC Groupe is 2.75 times less risky than Coil SANV. It trades about 0.18 of its potential returns per unit of risk. Coil SANV is currently generating about -0.22 per unit of risk. If you would invest 17,550 in EPC Groupe on August 28, 2024 and sell it today you would earn a total of 850.00 from holding EPC Groupe or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EPC Groupe vs. Coil SANV
Performance |
| Timeline |
| EPC Groupe |
| Coil SANV |
EPC Groupe and Coil SANV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPC Groupe and Coil SANV
The main advantage of trading using opposite EPC Groupe and Coil SANV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPC Groupe position performs unexpectedly, Coil SANV 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 Coil SANV will offset losses from the drop in Coil SANV's long position.| EPC Groupe vs. Robertet SA | EPC Groupe vs. Grard Perrier Industrie | EPC Groupe vs. lectricite de Strasbourg | EPC Groupe vs. Samse SA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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