Correlation Between Ekinops SA and Damartex

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

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

Diversification Opportunities for Ekinops SA and Damartex

-0.14

Correlation Coefficient

Ekinops SA  Damartex

Good diversification

The 3 months correlation between Ekinops and Damartex is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ekinops SA and Damartex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damartex and Ekinops 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 Ekinops SA are associated (or correlated) with Damartex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Damartex has no effect on the direction of Ekinops SA i.e., Ekinops SA and Damartex go up and down completely randomly.

Pair Corralation between Ekinops SA and Damartex

Assuming the 90 days trading horizon Ekinops SA is expected to under-perform the Damartex. But the stock apears to be less risky and, when comparing its historical volatility, Ekinops SA is 1.05 times less risky than Damartex. The stock trades about -0.05 of its potential returns per unit of risk. The Damartex is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  1,295  in Damartex on September 24, 2024 and sell it today you would lose (747.00) from holding Damartex or give up 57.68% of portfolio value over 90 days.

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

Ekinops SA  vs.  Damartex

Ekinops SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Damartex

Risk-Adjusted Performance

3 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Damartex are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Damartex may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ekinops SA and Damartex

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

The idea behind Ekinops SA and Damartex 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.