Correlation Between Ekinops SA and SPDR MSCI

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

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

Diversification Opportunities for Ekinops SA and SPDR MSCI

-0.32

Correlation Coefficient

Ekinops SA  SPDR MSCI

Very good diversification

The 3 months correlation between Ekinops and SPDR is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ekinops SA and SPDR MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Europe 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 SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI Europe has no effect on the direction of Ekinops SA i.e., Ekinops SA and SPDR MSCI go up and down completely randomly.

Pair Corralation between Ekinops SA and SPDR MSCI

Assuming the 90 days trading horizon Ekinops SA is expected to generate 2.75 times more return on investment than SPDR MSCI. However, Ekinops SA is 2.75 times more volatile than SPDR MSCI Europe. It trades about 0.04 of its potential returns per unit of risk. SPDR MSCI Europe is currently generating about 0.06 per unit of risk. If you would invest  351.00  in Ekinops SA on December 29, 2024 and sell it today you would earn a total of  18.00  from holding Ekinops SA or generate 5.13% 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.  SPDR MSCI Europe

Ekinops SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ekinops SA are ranked lower than 3 (%) 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.

SPDR MSCI Europe

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR MSCI Europe are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SPDR MSCI is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ekinops SA and SPDR MSCI

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

The idea behind Ekinops SA and SPDR MSCI Europe 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.