Correlation Between EPC Groupe and CMG Cleantech
Can any of the company-specific risk be diversified away by investing in both EPC Groupe and CMG Cleantech 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 CMG Cleantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPC Groupe and CMG Cleantech SA, you can compare the effects of market volatilities on EPC Groupe and CMG Cleantech 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 CMG Cleantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPC Groupe and CMG Cleantech.
Diversification Opportunities for EPC Groupe and CMG Cleantech
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EPC and CMG is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding EPC Groupe and CMG Cleantech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMG Cleantech 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 CMG Cleantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMG Cleantech SA has no effect on the direction of EPC Groupe i.e., EPC Groupe and CMG Cleantech go up and down completely randomly.
Pair Corralation between EPC Groupe and CMG Cleantech
Assuming the 90 days trading horizon EPC Groupe is expected to generate 0.39 times more return on investment than CMG Cleantech. However, EPC Groupe is 2.55 times less risky than CMG Cleantech. It trades about 0.07 of its potential returns per unit of risk. CMG Cleantech SA is currently generating about -0.01 per unit of risk. If you would invest 9,383 in EPC Groupe on August 27, 2024 and sell it today you would earn a total of 9,117 from holding EPC Groupe or generate 97.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.1% |
| Values | Daily Returns |
EPC Groupe vs. CMG Cleantech SA
Performance |
| Timeline |
| EPC Groupe |
| CMG Cleantech SA |
EPC Groupe and CMG Cleantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPC Groupe and CMG Cleantech
The main advantage of trading using opposite EPC Groupe and CMG Cleantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPC Groupe position performs unexpectedly, CMG Cleantech 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 CMG Cleantech will offset losses from the drop in CMG Cleantech'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 |
| CMG Cleantech vs. EPC Groupe | CMG Cleantech vs. Groupe Sfpi | CMG Cleantech vs. Baikowski SASU | CMG Cleantech vs. NSE 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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