Correlation Between EPC Groupe and Lectricite
Can any of the company-specific risk be diversified away by investing in both EPC Groupe and Lectricite 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 Lectricite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPC Groupe and lectricite de Strasbourg, you can compare the effects of market volatilities on EPC Groupe and Lectricite 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 Lectricite. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPC Groupe and Lectricite.
Diversification Opportunities for EPC Groupe and Lectricite
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EPC and Lectricite is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding EPC Groupe and lectricite de Strasbourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on lectricite de Strasbourg 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 Lectricite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of lectricite de Strasbourg has no effect on the direction of EPC Groupe i.e., EPC Groupe and Lectricite go up and down completely randomly.
Pair Corralation between EPC Groupe and Lectricite
Assuming the 90 days trading horizon EPC Groupe is expected to generate 2.49 times more return on investment than Lectricite. However, EPC Groupe is 2.49 times more volatile than lectricite de Strasbourg. It trades about 0.11 of its potential returns per unit of risk. lectricite de Strasbourg is currently generating about 0.03 per unit of risk. If you would invest 11,120 in EPC Groupe on September 1, 2024 and sell it today you would earn a total of 7,230 from holding EPC Groupe or generate 65.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
EPC Groupe vs. lectricite de Strasbourg
Performance |
| Timeline |
| EPC Groupe |
| lectricite de Strasbourg |
EPC Groupe and Lectricite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPC Groupe and Lectricite
The main advantage of trading using opposite EPC Groupe and Lectricite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPC Groupe position performs unexpectedly, Lectricite 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 Lectricite will offset losses from the drop in Lectricite'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 |
| Lectricite vs. Thermador Groupe SA | Lectricite vs. Burelle SA | Lectricite vs. Interparfums SA | Lectricite vs. Societe LDC 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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