Correlation Between Esker SA and Claranova

Can any of the company-specific risk be diversified away by investing in both Esker SA and Claranova 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 Esker SA and Claranova into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Esker SA and Claranova SE, you can compare the effects of market volatilities on Esker SA and Claranova 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 Esker SA with a short position of Claranova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esker SA and Claranova.

Diversification Opportunities for Esker SA and Claranova

0.18

Correlation Coefficient

Esker SA  Claranova

Average diversification

The 3 months correlation between Esker and Claranova is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Esker SA and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE and Esker 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 Esker SA are associated (or correlated) with Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of Esker SA i.e., Esker SA and Claranova go up and down completely randomly.

Pair Corralation between Esker SA and Claranova

Assuming the 90 days trading horizon Esker SA is expected to generate 0.58 times more return on investment than Claranova. However, Esker SA is 1.73 times less risky than Claranova. It trades about 0.11 of its potential returns per unit of risk. Claranova SE is currently generating about 0.02 per unit of risk. If you would invest  23,340  in Esker SA on September 2, 2024 and sell it today you would earn a total of  2,720  from holding Esker SA or generate 11.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Esker SA  vs.  Claranova SE

Esker SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Esker SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Esker SA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Claranova SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Claranova SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Claranova is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Esker SA and Claranova

The main advantage of trading using opposite Esker SA and Claranova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esker SA position performs unexpectedly, Claranova 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 Claranova will offset losses from the drop in Claranova's long position.

The idea behind Esker SA and Claranova SE 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.