Correlation Between Ekinops SA and Moulinvest

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

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

Diversification Opportunities for Ekinops SA and Moulinvest

0.64

Correlation Coefficient

Ekinops SA  Moulinvest

Poor diversification

The 3 months correlation between Ekinops and Moulinvest is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ekinops SA and Moulinvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moulinvest 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 Moulinvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moulinvest has no effect on the direction of Ekinops SA i.e., Ekinops SA and Moulinvest go up and down completely randomly.

Pair Corralation between Ekinops SA and Moulinvest

Assuming the 90 days trading horizon Ekinops SA is expected to under-perform the Moulinvest. In addition to that, Ekinops SA is 1.22 times more volatile than Moulinvest. It trades about -0.08 of its total potential returns per unit of risk. Moulinvest is currently generating about -0.05 per unit of volatility. If you would invest  1,400  in Moulinvest on September 16, 2024 and sell it today you would lose (105.00) from holding Moulinvest or give up 7.5% of portfolio value over 90 days.

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

Ekinops SA  vs.  Moulinvest

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.

Moulinvest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moulinvest has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Moulinvest 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 Moulinvest

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

The idea behind Ekinops SA and Moulinvest 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.