Correlation Between Wallix Group and Esker SA

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

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

Diversification Opportunities for Wallix Group and Esker SA

-0.68

Correlation Coefficient

Wallix Group  Esker SA

Excellent diversification

The 3 months correlation between Wallix and Esker is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Wallix Group SA and Esker SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esker SA and Wallix 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 Wallix Group SA 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 Wallix Group i.e., Wallix Group and Esker SA go up and down completely randomly.

Pair Corralation between Wallix Group and Esker SA

Assuming the 90 days trading horizon Wallix Group SA is expected to generate 10.64 times more return on investment than Esker SA. However, Wallix Group is 10.64 times more volatile than Esker SA. It trades about 0.08 of its potential returns per unit of risk. Esker SA is currently generating about 0.11 per unit of risk. If you would invest  970.00  in Wallix Group SA on October 5, 2024 and sell it today you would earn a total of  16.00  from holding Wallix Group SA or generate 1.65% return on investment over 90 days.

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

Wallix Group SA  vs.  Esker SA

Wallix Group SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wallix Group SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Wallix Group 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 Wallix Group and Esker SA

The main advantage of trading using opposite Wallix Group and Esker SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wallix Group 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 Wallix Group SA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.