Correlation Between CMG Cleantech and EPC Groupe
Can any of the company-specific risk be diversified away by investing in both CMG Cleantech and EPC Groupe 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 CMG Cleantech and EPC Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMG Cleantech SA and EPC Groupe, you can compare the effects of market volatilities on CMG Cleantech and EPC Groupe 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 CMG Cleantech with a short position of EPC Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMG Cleantech and EPC Groupe.
Diversification Opportunities for CMG Cleantech and EPC Groupe
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CMG and EPC is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding CMG Cleantech SA and EPC Groupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPC Groupe and CMG Cleantech 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 CMG Cleantech SA are associated (or correlated) with EPC Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPC Groupe has no effect on the direction of CMG Cleantech i.e., CMG Cleantech and EPC Groupe go up and down completely randomly.
Pair Corralation between CMG Cleantech and EPC Groupe
Assuming the 90 days trading horizon CMG Cleantech SA is expected to under-perform the EPC Groupe. In addition to that, CMG Cleantech is 2.55 times more volatile than EPC Groupe. It trades about -0.01 of its total potential returns per unit of risk. EPC Groupe is currently generating about 0.07 per unit of volatility. 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 |
CMG Cleantech SA vs. EPC Groupe
Performance |
| Timeline |
| CMG Cleantech SA |
| EPC Groupe |
CMG Cleantech and EPC Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMG Cleantech and EPC Groupe
The main advantage of trading using opposite CMG Cleantech and EPC Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMG Cleantech position performs unexpectedly, EPC Groupe 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 EPC Groupe will offset losses from the drop in EPC Groupe's long position.| CMG Cleantech vs. EPC Groupe | CMG Cleantech vs. Groupe Sfpi | CMG Cleantech vs. Baikowski SASU | CMG Cleantech vs. NSE SA |
| EPC Groupe vs. Robertet SA | EPC Groupe vs. Grard Perrier Industrie | EPC Groupe vs. lectricite de Strasbourg | EPC Groupe vs. Samse 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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