Correlation Between Ekinops SA and ISPD Network

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

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

Diversification Opportunities for Ekinops SA and ISPD Network

0.14

Correlation Coefficient

Ekinops SA  ISPD Network

Average diversification

The 3 months correlation between Ekinops and ISPD is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ekinops SA and ISPD Network SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISPD Network 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 ISPD Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISPD Network SA has no effect on the direction of Ekinops SA i.e., Ekinops SA and ISPD Network go up and down completely randomly.

Pair Corralation between Ekinops SA and ISPD Network

Assuming the 90 days trading horizon Ekinops SA is expected to under-perform the ISPD Network. In addition to that, Ekinops SA is 1.7 times more volatile than ISPD Network SA. It trades about -0.02 of its total potential returns per unit of risk. ISPD Network SA is currently generating about -0.02 per unit of volatility. If you would invest  370.00  in ISPD Network SA on October 5, 2024 and sell it today you would lose (54.00) from holding ISPD Network SA or give up 14.59% of portfolio value over 90 days.

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

Ekinops SA  vs.  ISPD Network SA

Ekinops SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ekinops SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Ekinops SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ISPD Network SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ISPD Network SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, ISPD Network 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 Ekinops SA and ISPD Network

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

The idea behind Ekinops SA and ISPD Network 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.