Correlation Between Orapi SA and Eramet SA
Can any of the company-specific risk be diversified away by investing in both Orapi SA and Eramet SA 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 Orapi SA and Eramet SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orapi SA and Eramet SA, you can compare the effects of market volatilities on Orapi SA and Eramet SA 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 Orapi SA with a short position of Eramet SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orapi SA and Eramet SA.
Diversification Opportunities for Orapi SA and Eramet SA
Very good diversification
The 3 months correlation between Orapi and Eramet is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Orapi SA and Eramet SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eramet SA and Orapi SA 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 Orapi SA are associated (or correlated) with Eramet SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eramet SA has no effect on the direction of Orapi SA i.e., Orapi SA and Eramet SA go up and down completely randomly.
Pair Corralation between Orapi SA and Eramet SA
Assuming the 90 days trading horizon Orapi SA is expected to generate 0.06 times more return on investment than Eramet SA. However, Orapi SA is 17.75 times less risky than Eramet SA. It trades about 0.21 of its potential returns per unit of risk. Eramet SA is currently generating about -0.11 per unit of risk. If you would invest 646.00 in Orapi SA on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Orapi SA or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orapi SA vs. Eramet SA
Performance |
| Timeline |
| Orapi SA |
| Eramet SA |
Orapi SA and Eramet SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orapi SA and Eramet SA
The main advantage of trading using opposite Orapi SA and Eramet SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orapi SA position performs unexpectedly, Eramet SA 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 Eramet SA will offset losses from the drop in Eramet SA's long position.| Orapi SA vs. Sensorion SA | Orapi SA vs. Fiducial Office Solutions | Orapi SA vs. Manitou BF SA | Orapi SA vs. Ossiam Minimum Variance |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |