Correlation Between Etablissements Maurel and AB Science

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

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

Diversification Opportunities for Etablissements Maurel and AB Science

-0.17

Correlation Coefficient

Etablissements Maurel  AB Science

Good diversification

The 3 months correlation between Etablissements and AB Science is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Etablissements Maurel et and AB Science SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Science SA and Etablissements Maurel 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 Etablissements Maurel et are associated (or correlated) with AB Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Science SA has no effect on the direction of Etablissements Maurel i.e., Etablissements Maurel and AB Science go up and down completely randomly.

Pair Corralation between Etablissements Maurel and AB Science

Assuming the 90 days trading horizon Etablissements Maurel et is expected to generate 0.9 times more return on investment than AB Science. However, Etablissements Maurel et is 1.11 times less risky than AB Science. It trades about 0.08 of its potential returns per unit of risk. AB Science SA is currently generating about -0.42 per unit of risk. If you would invest  494.00  in Etablissements Maurel et on September 12, 2024 and sell it today you would earn a total of  14.00  from holding Etablissements Maurel et or generate 2.83% return on investment over 90 days.

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

Etablissements Maurel et  vs.  AB Science SA

Etablissements Maurel

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Etablissements Maurel et are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Etablissements Maurel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AB Science SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AB Science 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.

Pair Trading with Etablissements Maurel and AB Science

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

The idea behind Etablissements Maurel et and AB Science 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.