Correlation Between Elia Group and Accentis

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

By analyzing existing cross correlation between Elia Group SANV and Accentis, you can compare the effects of market volatilities on Elia Group and Accentis 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 Elia Group with a short position of Accentis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elia Group and Accentis.

Diversification Opportunities for Elia Group and Accentis

0.4

Correlation Coefficient

Elia Group  Accentis

Very weak diversification

The 3 months correlation between Elia and Accentis is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Elia Group SANV and Accentis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accentis and Elia Group 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 Elia Group SANV are associated (or correlated) with Accentis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accentis has no effect on the direction of Elia Group i.e., Elia Group and Accentis go up and down completely randomly.

Pair Corralation between Elia Group and Accentis

Assuming the 90 days trading horizon Elia Group SANV is expected to generate 1.05 times more return on investment than Accentis. However, Elia Group is 1.05 times more volatile than Accentis. It trades about 0.1 of its potential returns per unit of risk. Accentis is currently generating about 0.02 per unit of risk. If you would invest  6,811  in Elia Group SANV on December 30, 2024 and sell it today you would earn a total of  1,364  from holding Elia Group SANV or generate 20.03% return on investment over 90 days.

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

Elia Group SANV  vs.  Accentis

Elia Group SANV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elia Group SANV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Elia Group reported solid returns over the last few months and may actually be approaching a breakup point.

Accentis

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Accentis are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Accentis is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Elia Group and Accentis

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

The idea behind Elia Group SANV and Accentis 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.