Correlation Between Ekter SA and As Commercial

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

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

Diversification Opportunities for Ekter SA and As Commercial

0.85

Correlation Coefficient

Ekter SA  As Commercial

Very poor diversification

The 3 months correlation between Ekter and ASCO is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ekter SA and As Commercial Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on As Commercial Industrial and Ekter 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 Ekter SA are associated (or correlated) with As Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of As Commercial Industrial has no effect on the direction of Ekter SA i.e., Ekter SA and As Commercial go up and down completely randomly.

Pair Corralation between Ekter SA and As Commercial

Assuming the 90 days trading horizon Ekter SA is expected to under-perform the As Commercial. In addition to that, Ekter SA is 2.26 times more volatile than As Commercial Industrial. It trades about -0.08 of its total potential returns per unit of risk. As Commercial Industrial is currently generating about 0.02 per unit of volatility. If you would invest  278.00  in As Commercial Industrial on September 14, 2024 and sell it today you would earn a total of  4.00  from holding As Commercial Industrial or generate 1.44% return on investment over 90 days.

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

Ekter SA  vs.  As Commercial Industrial

Ekter SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ekter SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

As Commercial Industrial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in As Commercial Industrial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, As Commercial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ekter SA and As Commercial

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

The idea behind Ekter SA and As Commercial Industrial 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.