Correlation Between Elis SA and Robertet

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

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

Diversification Opportunities for Elis SA and Robertet

0.01

Correlation Coefficient

Elis SA  Robertet

Significant diversification

The 3 months correlation between Elis and Robertet is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Elis SA and Robertet SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robertet SA and Elis 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 Elis SA are associated (or correlated) with Robertet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robertet SA has no effect on the direction of Elis SA i.e., Elis SA and Robertet go up and down completely randomly.

Pair Corralation between Elis SA and Robertet

Assuming the 90 days trading horizon Elis SA is expected to under-perform the Robertet. In addition to that, Elis SA is 2.16 times more volatile than Robertet SA. It trades about -0.08 of its total potential returns per unit of risk. Robertet SA is currently generating about 0.01 per unit of volatility. If you would invest  88,500  in Robertet SA on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Robertet SA or generate 0.0% return on investment over 90 days.

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

Elis SA  vs.  Robertet SA

Elis SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elis 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.

Robertet SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Elis SA and Robertet

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

The idea behind Elis SA and Robertet 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.