Correlation Between Ekinops SA and Xilam Animation

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Can any of the company-specific risk be diversified away by investing in both Ekinops SA and Xilam Animation 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 Xilam Animation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ekinops SA and Xilam Animation, you can compare the effects of market volatilities on Ekinops SA and Xilam Animation 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 Xilam Animation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekinops SA and Xilam Animation.

Diversification Opportunities for Ekinops SA and Xilam Animation

-0.08
  Correlation Coefficient

Good diversification

The 3 months correlation between Ekinops and Xilam is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ekinops SA and Xilam Animation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilam Animation 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 Xilam Animation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilam Animation has no effect on the direction of Ekinops SA i.e., Ekinops SA and Xilam Animation go up and down completely randomly.

Pair Corralation between Ekinops SA and Xilam Animation

Assuming the 90 days trading horizon Ekinops SA is expected to generate 1.3 times more return on investment than Xilam Animation. However, Ekinops SA is 1.3 times more volatile than Xilam Animation. It trades about 0.0 of its potential returns per unit of risk. Xilam Animation is currently generating about -0.04 per unit of risk. If you would invest  350.00  in Ekinops SA on August 31, 2024 and sell it today you would lose (6.00) from holding Ekinops SA or give up 1.71% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ekinops SA  vs.  Xilam Animation

 Performance 
       Timeline  
Ekinops SA 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

0 of 100

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

Ekinops SA and Xilam Animation Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ekinops SA and Xilam Animation

The main advantage of trading using opposite Ekinops SA and Xilam Animation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ekinops SA position performs unexpectedly, Xilam Animation 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 Xilam Animation will offset losses from the drop in Xilam Animation's long position.
The idea behind Ekinops SA and Xilam Animation 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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