Correlation Between Euroconsultants and Intralot

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

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

Diversification Opportunities for Euroconsultants and Intralot

0.82

Correlation Coefficient

Euroconsultants  Intralot

Very poor diversification

The 3 months correlation between Euroconsultants and Intralot is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Euroconsultants SA and Intralot SA Integrated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intralot SA Integrated and Euroconsultants 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 Euroconsultants SA are associated (or correlated) with Intralot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intralot SA Integrated has no effect on the direction of Euroconsultants i.e., Euroconsultants and Intralot go up and down completely randomly.

Pair Corralation between Euroconsultants and Intralot

Assuming the 90 days trading horizon Euroconsultants SA is expected to generate 0.81 times more return on investment than Intralot. However, Euroconsultants SA is 1.24 times less risky than Intralot. It trades about -0.1 of its potential returns per unit of risk. Intralot SA Integrated is currently generating about -0.1 per unit of risk. If you would invest  126.00  in Euroconsultants SA on September 14, 2024 and sell it today you would lose (13.00) from holding Euroconsultants SA or give up 10.32% of portfolio value over 90 days.

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

Euroconsultants SA  vs.  Intralot SA Integrated

Euroconsultants SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Euroconsultants SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Intralot SA Integrated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intralot SA Integrated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Euroconsultants and Intralot

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

The idea behind Euroconsultants SA and Intralot SA Integrated 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 CEOs Directory module to screen CEOs from public companies around the world.