Correlation Between Ekter SA and GEK TERNA

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

By analyzing existing cross correlation between Ekter SA and GEK TERNA Holdings, you can compare the effects of market volatilities on Ekter SA and GEK TERNA 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 Ekter SA with a short position of GEK TERNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekter SA and GEK TERNA.

Diversification Opportunities for Ekter SA and GEK TERNA

0.54

Correlation Coefficient

Ekter SA  GEK TERNA

Very weak diversification

The 3 months correlation between Ekter and GEK is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ekter SA and GEK TERNA Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEK TERNA Holdings and Ekter 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 Ekter SA are associated (or correlated) with GEK TERNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEK TERNA Holdings has no effect on the direction of Ekter SA i.e., Ekter SA and GEK TERNA go up and down completely randomly.

Pair Corralation between Ekter SA and GEK TERNA

Assuming the 90 days trading horizon Ekter SA is expected to generate 2.95 times more return on investment than GEK TERNA. However, Ekter SA is 2.95 times more volatile than GEK TERNA Holdings. It trades about 0.07 of its potential returns per unit of risk. GEK TERNA Holdings is currently generating about 0.13 per unit of risk. If you would invest  180.00  in Ekter SA on December 30, 2024 and sell it today you would earn a total of  19.00  from holding Ekter SA or generate 10.56% return on investment over 90 days.

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

Ekter SA  vs.  GEK TERNA Holdings

Ekter SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ekter SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ekter SA sustained solid returns over the last few months and may actually be approaching a breakup point.

GEK TERNA Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GEK TERNA Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, GEK TERNA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ekter SA and GEK TERNA

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

The idea behind Ekter SA and GEK TERNA Holdings 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.