Correlation Between Samse SA and Europlasma
Can any of the company-specific risk be diversified away by investing in both Samse SA and Europlasma 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 Samse SA and Europlasma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samse SA and Europlasma SA, you can compare the effects of market volatilities on Samse SA and Europlasma 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 Samse SA with a short position of Europlasma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samse SA and Europlasma.
Diversification Opportunities for Samse SA and Europlasma
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samse and Europlasma is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Samse SA and Europlasma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europlasma SA and Samse 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 Samse SA are associated (or correlated) with Europlasma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europlasma SA has no effect on the direction of Samse SA i.e., Samse SA and Europlasma go up and down completely randomly.
Pair Corralation between Samse SA and Europlasma
Assuming the 90 days trading horizon Samse SA is expected to under-perform the Europlasma. But the stock apears to be less risky and, when comparing its historical volatility, Samse SA is 16.63 times less risky than Europlasma. The stock trades about -0.19 of its potential returns per unit of risk. The Europlasma SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4.81 in Europlasma SA on September 13, 2024 and sell it today you would lose (0.66) from holding Europlasma SA or give up 13.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samse SA vs. Europlasma SA
Performance |
| Timeline |
| Samse SA |
| Europlasma SA |
Samse SA and Europlasma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samse SA and Europlasma
The main advantage of trading using opposite Samse SA and Europlasma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samse SA position performs unexpectedly, Europlasma 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 Europlasma will offset losses from the drop in Europlasma's long position.The idea behind Samse SA and Europlasma SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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