Correlation Between Etablissements Maurel and Exel Industries
Can any of the company-specific risk be diversified away by investing in both Etablissements Maurel and Exel Industries 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 Exel Industries 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 Exel Industries, you can compare the effects of market volatilities on Etablissements Maurel and Exel Industries 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 Exel Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etablissements Maurel and Exel Industries.
Diversification Opportunities for Etablissements Maurel and Exel Industries
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Etablissements and Exel is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Etablissements Maurel et and Exel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exel Industries 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 Exel Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exel Industries has no effect on the direction of Etablissements Maurel i.e., Etablissements Maurel and Exel Industries go up and down completely randomly.
Pair Corralation between Etablissements Maurel and Exel Industries
Assuming the 90 days trading horizon Etablissements Maurel et is expected to under-perform the Exel Industries. But the stock apears to be less risky and, when comparing its historical volatility, Etablissements Maurel et is 1.16 times less risky than Exel Industries. The stock trades about -0.16 of its potential returns per unit of risk. The Exel Industries is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 4,454 in Exel Industries on November 28, 2024 and sell it today you would lose (164.00) from holding Exel Industries or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Etablissements Maurel et vs. Exel Industries
Performance |
| Timeline |
| Etablissements Maurel |
| Exel Industries |
Etablissements Maurel and Exel Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etablissements Maurel and Exel Industries
The main advantage of trading using opposite Etablissements Maurel and Exel Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etablissements Maurel position performs unexpectedly, Exel Industries 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 Exel Industries will offset losses from the drop in Exel Industries' long position.| Etablissements Maurel vs. Vallourec | Etablissements Maurel vs. Eramet SA | Etablissements Maurel vs. Soitec SA | Etablissements Maurel vs. Nexans SA |
| Exel Industries vs. Manitou BF SA | Exel Industries vs. Lisi SA | Exel Industries vs. Guerbet S A | Exel Industries vs. Haulotte Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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