Correlation Between Ekinops SA and Gascogne

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

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

Diversification Opportunities for Ekinops SA and Gascogne

0.59

Correlation Coefficient

Ekinops SA  Gascogne

Very weak diversification

The 3 months correlation between Ekinops and Gascogne is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ekinops SA and Gascogne SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gascogne SA and Ekinops 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 Ekinops SA are associated (or correlated) with Gascogne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gascogne SA has no effect on the direction of Ekinops SA i.e., Ekinops SA and Gascogne go up and down completely randomly.

Pair Corralation between Ekinops SA and Gascogne

Assuming the 90 days trading horizon Ekinops SA is expected to generate 0.86 times more return on investment than Gascogne. However, Ekinops SA is 1.16 times less risky than Gascogne. It trades about -0.06 of its potential returns per unit of risk. Gascogne SA is currently generating about -0.06 per unit of risk. If you would invest  382.00  in Ekinops SA on September 18, 2024 and sell it today you would lose (39.00) from holding Ekinops SA or give up 10.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Ekinops SA  vs.  Gascogne SA

Ekinops SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ekinops SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Gascogne SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gascogne SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Ekinops SA and Gascogne

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

The idea behind Ekinops SA and Gascogne 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.