Correlation Between SA Catana and Ekinops SA

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

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

Diversification Opportunities for SA Catana and Ekinops SA

-0.42

Correlation Coefficient

SA Catana  Ekinops SA

Very good diversification

The 3 months correlation between CATG and Ekinops is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding SA Catana Group and Ekinops SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekinops SA and SA Catana 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 SA Catana Group 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 SA Catana i.e., SA Catana and Ekinops SA go up and down completely randomly.

Pair Corralation between SA Catana and Ekinops SA

Assuming the 90 days trading horizon SA Catana Group is expected to under-perform the Ekinops SA. But the stock apears to be less risky and, when comparing its historical volatility, SA Catana Group is 1.15 times less risky than Ekinops SA. The stock trades about -0.03 of its potential returns per unit of risk. The Ekinops SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  351.00  in Ekinops SA on December 30, 2024 and sell it today you would earn a total of  18.00  from holding Ekinops SA or generate 5.13% return on investment over 90 days.

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

SA Catana Group  vs.  Ekinops SA

SA Catana Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days SA Catana Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SA Catana is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ekinops SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ekinops SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Ekinops SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SA Catana and Ekinops SA

The main advantage of trading using opposite SA Catana and Ekinops SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SA Catana 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.

The idea behind SA Catana Group and Ekinops 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.