Correlation Between EPC Groupe and Robertet

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

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

Diversification Opportunities for EPC Groupe and Robertet

-0.34

Correlation Coefficient

EPC Groupe  Robertet

Very good diversification

The 3 months correlation between EPC and Robertet is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding EPC Groupe and Robertet SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robertet SA and EPC Groupe 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 EPC Groupe 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 EPC Groupe i.e., EPC Groupe and Robertet go up and down completely randomly.

Pair Corralation between EPC Groupe and Robertet

Assuming the 90 days trading horizon EPC Groupe is expected to generate 1.9 times more return on investment than Robertet. However, EPC Groupe is 1.9 times more volatile than Robertet SA. It trades about 0.03 of its potential returns per unit of risk. Robertet SA is currently generating about -0.13 per unit of risk. If you would invest  18,400  in EPC Groupe on September 14, 2024 and sell it today you would earn a total of  500.00  from holding EPC Groupe or generate 2.72% return on investment over 90 days.

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

EPC Groupe  vs.  Robertet SA

EPC Groupe

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EPC Groupe are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, EPC Groupe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with EPC Groupe and Robertet

The main advantage of trading using opposite EPC Groupe and Robertet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPC Groupe 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 EPC Groupe 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.