Correlation Between Esker SA and Aiadvertising

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

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

Diversification Opportunities for Esker SA and Aiadvertising

0.49

Correlation Coefficient

Esker SA  Aiadvertising

Very weak diversification

The 3 months correlation between Esker and Aiadvertising is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Esker SA and Aiadvertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aiadvertising and Esker 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 Esker SA are associated (or correlated) with Aiadvertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aiadvertising has no effect on the direction of Esker SA i.e., Esker SA and Aiadvertising go up and down completely randomly.

Pair Corralation between Esker SA and Aiadvertising

Assuming the 90 days horizon Esker SA is expected to generate 34.07 times less return on investment than Aiadvertising. But when comparing it to its historical volatility, Esker SA is 22.46 times less risky than Aiadvertising. It trades about 0.15 of its potential returns per unit of risk. Aiadvertising is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Aiadvertising on September 5, 2024 and sell it today you would earn a total of  0.23  from holding Aiadvertising or generate 1150.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Esker SA  vs.  Aiadvertising

Esker SA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Esker SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Esker SA reported solid returns over the last few months and may actually be approaching a breakup point.

Aiadvertising

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aiadvertising are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Aiadvertising exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Esker SA and Aiadvertising

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

The idea behind Esker SA and Aiadvertising 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.