Correlation Between Elia Group and Ekopak BV

Can any of the company-specific risk be diversified away by investing in both Elia Group and Ekopak BV 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 Ekopak BV 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 Ekopak BV, you can compare the effects of market volatilities on Elia Group and Ekopak BV 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 Ekopak BV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elia Group and Ekopak BV.

Diversification Opportunities for Elia Group and Ekopak BV

-0.78

Correlation Coefficient

Elia Group  Ekopak BV

Pay attention - limited upside

The 3 months correlation between Elia and Ekopak is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Elia Group SANV and Ekopak BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekopak BV 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 Ekopak BV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekopak BV has no effect on the direction of Elia Group i.e., Elia Group and Ekopak BV go up and down completely randomly.

Pair Corralation between Elia Group and Ekopak BV

Assuming the 90 days trading horizon Elia Group SANV is expected to generate 0.78 times more return on investment than Ekopak BV. However, Elia Group SANV is 1.28 times less risky than Ekopak BV. It trades about 0.1 of its potential returns per unit of risk. Ekopak BV is currently generating about -0.19 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Elia Group SANV  vs.  Ekopak BV

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.

Ekopak BV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ekopak BV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Elia Group and Ekopak BV

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

The idea behind Elia Group SANV and Ekopak BV 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.