Correlation Between Etablissements Maurel and Esso SAF
Can any of the company-specific risk be diversified away by investing in both Etablissements Maurel and Esso SAF 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 Etablissements Maurel and Esso SAF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Etablissements Maurel et and Esso SAF, you can compare the effects of market volatilities on Etablissements Maurel and Esso SAF 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 Etablissements Maurel with a short position of Esso SAF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etablissements Maurel and Esso SAF.
Diversification Opportunities for Etablissements Maurel and Esso SAF
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Etablissements and Esso is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Etablissements Maurel et and Esso SAF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esso SAF and Etablissements Maurel 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 Etablissements Maurel et are associated (or correlated) with Esso SAF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esso SAF has no effect on the direction of Etablissements Maurel i.e., Etablissements Maurel and Esso SAF go up and down completely randomly.
Pair Corralation between Etablissements Maurel and Esso SAF
Assuming the 90 days trading horizon Etablissements Maurel et is expected to generate 0.92 times more return on investment than Esso SAF. However, Etablissements Maurel et is 1.09 times less risky than Esso SAF. It trades about 0.23 of its potential returns per unit of risk. Esso SAF is currently generating about 0.11 per unit of risk. If you would invest 555.00 in Etablissements Maurel et on October 31, 2024 and sell it today you would earn a total of 57.00 from holding Etablissements Maurel et or generate 10.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Etablissements Maurel et vs. Esso SAF
Performance |
| Timeline |
| Etablissements Maurel |
| Esso SAF |
Etablissements Maurel and Esso SAF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etablissements Maurel and Esso SAF
The main advantage of trading using opposite Etablissements Maurel and Esso SAF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etablissements Maurel position performs unexpectedly, Esso SAF 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 Esso SAF will offset losses from the drop in Esso SAF's long position.| Etablissements Maurel vs. Vallourec | Etablissements Maurel vs. Eramet SA | Etablissements Maurel vs. Soitec SA | Etablissements Maurel vs. Nexans SA |
| Esso SAF vs. Etablissements Maurel et | Esso SAF vs. Eramet SA | Esso SAF vs. Socit BIC SA | Esso SAF vs. TotalEnergies EP Gabon |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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