Correlation Between Robertet and EPC Groupe
Can any of the company-specific risk be diversified away by investing in both Robertet 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 Robertet and EPC Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Robertet SA and EPC Groupe, you can compare the effects of market volatilities on Robertet 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 Robertet with a short position of EPC Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robertet and EPC Groupe.
Diversification Opportunities for Robertet and EPC Groupe
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Robertet and EPC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Robertet SA and EPC Groupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPC Groupe and Robertet 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 Robertet 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 Robertet i.e., Robertet and EPC Groupe go up and down completely randomly.
Pair Corralation between Robertet and EPC Groupe
Assuming the 90 days trading horizon Robertet SA is expected to under-perform the EPC Groupe. In addition to that, Robertet is 1.12 times more volatile than EPC Groupe. It trades about -0.21 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 18,150 in EPC Groupe on August 24, 2024 and sell it today you would earn a total of 550.00 from holding EPC Groupe or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Robertet SA vs. EPC Groupe
Performance |
| Timeline |
| Robertet SA |
| EPC Groupe |
Robertet and EPC Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Robertet and EPC Groupe
The main advantage of trading using opposite Robertet and EPC Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robertet 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.| Robertet vs. Tonnellerie Francois Freres | Robertet vs. Thermador Groupe SA | Robertet vs. Neurones | Robertet vs. Sartorius Stedim Biotech |
| EPC Groupe vs. Robertet SA | EPC Groupe vs. Grard Perrier Industrie | EPC Groupe vs. Samse SA | EPC Groupe vs. Manitou BF 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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