Correlation Between SQLI SA and Ekinops SA
Can any of the company-specific risk be diversified away by investing in both SQLI SA and Ekinops 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 SQLI SA and Ekinops SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SQLI SA and Ekinops SA, you can compare the effects of market volatilities on SQLI SA and Ekinops 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 SQLI SA with a short position of Ekinops SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SQLI SA and Ekinops SA.
Diversification Opportunities for SQLI SA and Ekinops SA
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SQLI and Ekinops is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SQLI SA and Ekinops SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekinops SA and SQLI 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 SQLI SA are associated (or correlated) with Ekinops SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekinops SA has no effect on the direction of SQLI SA i.e., SQLI SA and Ekinops SA go up and down completely randomly.
Pair Corralation between SQLI SA and Ekinops SA
Assuming the 90 days trading horizon SQLI SA is expected to generate 1.67 times more return on investment than Ekinops SA. However, SQLI SA is 1.67 times more volatile than Ekinops SA. It trades about 0.11 of its potential returns per unit of risk. Ekinops SA is currently generating about 0.04 per unit of risk. If you would invest 4,160 in SQLI SA on August 29, 2024 and sell it today you would earn a total of 1,240 from holding SQLI SA or generate 29.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SQLI SA vs. Ekinops SA
Performance |
| Timeline |
| SQLI SA |
| Ekinops SA |
SQLI SA and Ekinops SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SQLI SA and Ekinops SA
The main advantage of trading using opposite SQLI SA and Ekinops SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SQLI SA position performs unexpectedly, Ekinops 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 Ekinops SA will offset losses from the drop in Ekinops SA's long position.| SQLI SA vs. Neurones | SQLI SA vs. Manitou BF SA | SQLI SA vs. Ossiam Minimum Variance | SQLI SA vs. Granite 3x LVMH |
| Ekinops SA vs. Claranova SE | Ekinops SA vs. Derichebourg | Ekinops SA vs. Mersen SA | Ekinops SA vs. BigBen Interactive |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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