Correlation Between EPC Groupe and NSE SA
Can any of the company-specific risk be diversified away by investing in both EPC Groupe and NSE SA 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 NSE SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPC Groupe and NSE SA, you can compare the effects of market volatilities on EPC Groupe and NSE SA 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 NSE SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPC Groupe and NSE SA.
Diversification Opportunities for EPC Groupe and NSE SA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EPC and NSE is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding EPC Groupe and NSE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSE SA 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 NSE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSE SA has no effect on the direction of EPC Groupe i.e., EPC Groupe and NSE SA go up and down completely randomly.
Pair Corralation between EPC Groupe and NSE SA
Assuming the 90 days trading horizon EPC Groupe is expected to generate 0.98 times more return on investment than NSE SA. However, EPC Groupe is 1.02 times less risky than NSE SA. It trades about 0.07 of its potential returns per unit of risk. NSE SA is currently generating about 0.06 per unit of risk. If you would invest 9,631 in EPC Groupe on August 28, 2024 and sell it today you would earn a total of 8,769 from holding EPC Groupe or generate 91.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EPC Groupe vs. NSE SA
Performance |
| Timeline |
| EPC Groupe |
| NSE SA |
EPC Groupe and NSE SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPC Groupe and NSE SA
The main advantage of trading using opposite EPC Groupe and NSE SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPC Groupe position performs unexpectedly, NSE SA 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 NSE SA will offset losses from the drop in NSE SA'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 |
| NSE SA vs. Prodways Group SA | NSE SA vs. Claranova SE | NSE SA vs. DBV Technologies SA | NSE SA vs. Manitou BF 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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