Correlation Between Thermador Groupe and Ecoslops

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

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

Diversification Opportunities for Thermador Groupe and Ecoslops

-0.15

Correlation Coefficient

Thermador Groupe  Ecoslops

Good diversification

The 3 months correlation between Thermador and Ecoslops is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Thermador Groupe SA and Ecoslops SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecoslops SA and Thermador Groupe 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 Thermador Groupe SA are associated (or correlated) with Ecoslops. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecoslops SA has no effect on the direction of Thermador Groupe i.e., Thermador Groupe and Ecoslops go up and down completely randomly.

Pair Corralation between Thermador Groupe and Ecoslops

Assuming the 90 days trading horizon Thermador Groupe SA is expected to generate 0.37 times more return on investment than Ecoslops. However, Thermador Groupe SA is 2.71 times less risky than Ecoslops. It trades about -0.04 of its potential returns per unit of risk. Ecoslops SA is currently generating about -0.02 per unit of risk. If you would invest  7,938  in Thermador Groupe SA on December 2, 2024 and sell it today you would lose (1,358) from holding Thermador Groupe SA or give up 17.11% of portfolio value over 90 days.

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

Thermador Groupe SA  vs.  Ecoslops SA

Thermador Groupe

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thermador Groupe SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Thermador Groupe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ecoslops SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ecoslops SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Thermador Groupe and Ecoslops

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

The idea behind Thermador Groupe SA and Ecoslops SA 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..