Correlation Between Berkem Group and Entech SE

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

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

Diversification Opportunities for Berkem Group and Entech SE

-0.05

Correlation Coefficient

Berkem Group  Entech SE

Good diversification

The 3 months correlation between Berkem and Entech is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Berkem Group SA and Entech SE SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entech SE SAS and Berkem Group 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 Berkem Group SA are associated (or correlated) with Entech SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entech SE SAS has no effect on the direction of Berkem Group i.e., Berkem Group and Entech SE go up and down completely randomly.

Pair Corralation between Berkem Group and Entech SE

Assuming the 90 days trading horizon Berkem Group SA is expected to generate 1.84 times more return on investment than Entech SE. However, Berkem Group is 1.84 times more volatile than Entech SE SAS. It trades about 0.0 of its potential returns per unit of risk. Entech SE SAS is currently generating about -0.01 per unit of risk. If you would invest  561.00  in Berkem Group SA on October 10, 2024 and sell it today you would lose (251.00) from holding Berkem Group SA or give up 44.74% of portfolio value over 90 days.

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

Berkem Group SA  vs.  Entech SE SAS

Berkem Group SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Berkem Group SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Berkem Group is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Entech SE SAS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Berkem Group and Entech SE

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

The idea behind Berkem Group SA and Entech SE SAS 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.