Correlation Between Ekinops SA and Sergeferrari

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

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

Diversification Opportunities for Ekinops SA and Sergeferrari

-0.28

Correlation Coefficient

Ekinops SA  Sergeferrari

Very good diversification

The 3 months correlation between Ekinops and Sergeferrari is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ekinops SA and Sergeferrari G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sergeferrari G 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 Sergeferrari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sergeferrari G has no effect on the direction of Ekinops SA i.e., Ekinops SA and Sergeferrari go up and down completely randomly.

Pair Corralation between Ekinops SA and Sergeferrari

Assuming the 90 days trading horizon Ekinops SA is expected to generate 1.65 times less return on investment than Sergeferrari. In addition to that, Ekinops SA is 1.74 times more volatile than Sergeferrari G. It trades about 0.05 of its total potential returns per unit of risk. Sergeferrari G is currently generating about 0.15 per unit of volatility. If you would invest  506.00  in Sergeferrari G on December 25, 2024 and sell it today you would earn a total of  71.00  from holding Sergeferrari G or generate 14.03% return on investment over 90 days.

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

Ekinops SA  vs.  Sergeferrari G

Ekinops SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ekinops SA are ranked lower than 4 (%) 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.

Sergeferrari G

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sergeferrari G are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sergeferrari reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ekinops SA and Sergeferrari

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

The idea behind Ekinops SA and Sergeferrari G 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.