Correlation Between Ekinops SA and Invibes Advertising

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

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

Diversification Opportunities for Ekinops SA and Invibes Advertising

0.58

Correlation Coefficient

Ekinops SA  Invibes Advertising

Very weak diversification

The 3 months correlation between Ekinops and Invibes is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ekinops SA and Invibes Advertising NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invibes Advertising 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 Invibes Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invibes Advertising has no effect on the direction of Ekinops SA i.e., Ekinops SA and Invibes Advertising go up and down completely randomly.

Pair Corralation between Ekinops SA and Invibes Advertising

Assuming the 90 days trading horizon Ekinops SA is expected to under-perform the Invibes Advertising. But the stock apears to be less risky and, when comparing its historical volatility, Ekinops SA is 2.27 times less risky than Invibes Advertising. The stock trades about -0.17 of its potential returns per unit of risk. The Invibes Advertising NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  198.00  in Invibes Advertising NV on October 22, 2024 and sell it today you would earn a total of  4.00  from holding Invibes Advertising NV or generate 2.02% return on investment over 90 days.

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

Ekinops SA  vs.  Invibes Advertising NV

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 weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Invibes Advertising

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invibes Advertising NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Ekinops SA and Invibes Advertising

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

The idea behind Ekinops SA and Invibes Advertising NV 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.