Correlation Between Eutelsat Communications and Rubis SCA

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

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

Diversification Opportunities for Eutelsat Communications and Rubis SCA

0.53

Correlation Coefficient

Eutelsat Communications  Rubis SCA

Very weak diversification

The 3 months correlation between Eutelsat and Rubis is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eutelsat Communications SA and Rubis SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubis SCA and Eutelsat Communications 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 Eutelsat Communications SA are associated (or correlated) with Rubis SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubis SCA has no effect on the direction of Eutelsat Communications i.e., Eutelsat Communications and Rubis SCA go up and down completely randomly.

Pair Corralation between Eutelsat Communications and Rubis SCA

Assuming the 90 days trading horizon Eutelsat Communications SA is expected to under-perform the Rubis SCA. But the stock apears to be less risky and, when comparing its historical volatility, Eutelsat Communications SA is 1.13 times less risky than Rubis SCA. The stock trades about -0.28 of its potential returns per unit of risk. The Rubis SCA is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  2,814  in Rubis SCA on September 2, 2024 and sell it today you would lose (542.00) from holding Rubis SCA or give up 19.26% of portfolio value over 90 days.

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

Eutelsat Communications SA  vs.  Rubis SCA

Eutelsat Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eutelsat Communications 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 essential 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.

Rubis SCA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubis SCA 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 forward 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.

Pair Trading with Eutelsat Communications and Rubis SCA

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

The idea behind Eutelsat Communications SA and Rubis SCA 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.