Correlation Between Gaussin and Esker SA

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

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

Diversification Opportunities for Gaussin and Esker SA

0.27

Correlation Coefficient

Gaussin  Esker SA

Modest diversification

The 3 months correlation between Gaussin and Esker is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Gaussin and Esker SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esker SA and Gaussin 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 Gaussin are associated (or correlated) with Esker SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esker SA has no effect on the direction of Gaussin i.e., Gaussin and Esker SA go up and down completely randomly.

Pair Corralation between Gaussin and Esker SA

If you would invest  11.00  in Gaussin on October 17, 2024 and sell it today you would earn a total of  0.00  from holding Gaussin or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Gaussin  vs.  Esker SA

Gaussin

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gaussin are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Gaussin reported solid returns over the last few months and may actually be approaching a breakup point.

Esker SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Esker SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Esker SA is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Gaussin and Esker SA

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

The idea behind Gaussin and Esker 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.