Correlation Between Compagnie Des and EPC Groupe
Can any of the company-specific risk be diversified away by investing in both Compagnie Des 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 Compagnie Des and EPC Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie des Eaux and EPC Groupe, you can compare the effects of market volatilities on Compagnie Des 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 Compagnie Des with a short position of EPC Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Des and EPC Groupe.
Diversification Opportunities for Compagnie Des and EPC Groupe
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compagnie and EPC is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie des Eaux and EPC Groupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPC Groupe and Compagnie Des 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 Compagnie des Eaux 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 Compagnie Des i.e., Compagnie Des and EPC Groupe go up and down completely randomly.
Pair Corralation between Compagnie Des and EPC Groupe
Assuming the 90 days trading horizon Compagnie des Eaux is expected to under-perform the EPC Groupe. In addition to that, Compagnie Des is 1.47 times more volatile than EPC Groupe. It trades about -0.1 of its total potential returns per unit of risk. EPC Groupe is currently generating about 0.1 per unit of volatility. If you would invest 13,751 in EPC Groupe on August 26, 2024 and sell it today you would earn a total of 4,749 from holding EPC Groupe or generate 34.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Compagnie des Eaux vs. EPC Groupe
Performance |
| Timeline |
| Compagnie des Eaux |
| EPC Groupe |
Compagnie Des and EPC Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Des and EPC Groupe
The main advantage of trading using opposite Compagnie Des and EPC Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Des 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.| Compagnie Des vs. lectricite de Strasbourg | Compagnie Des vs. EPC Groupe | Compagnie Des vs. Methanor | Compagnie Des vs. Manitou BF 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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