Correlation Between Etablissements Maurel and Adocia

Can any of the company-specific risk be diversified away by investing in both Etablissements Maurel and Adocia 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 Adocia 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 Adocia, you can compare the effects of market volatilities on Etablissements Maurel and Adocia 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 Adocia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etablissements Maurel and Adocia.

Diversification Opportunities for Etablissements Maurel and Adocia

-0.16

Correlation Coefficient

Etablissements Maurel  Adocia

Good diversification

The 3 months correlation between Etablissements and Adocia is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Etablissements Maurel et and Adocia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adocia 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 Adocia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adocia has no effect on the direction of Etablissements Maurel i.e., Etablissements Maurel and Adocia go up and down completely randomly.

Pair Corralation between Etablissements Maurel and Adocia

Assuming the 90 days trading horizon Etablissements Maurel is expected to generate 6.92 times less return on investment than Adocia. But when comparing it to its historical volatility, Etablissements Maurel et is 3.14 times less risky than Adocia. It trades about 0.04 of its potential returns per unit of risk. Adocia is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  557.00  in Adocia on September 13, 2024 and sell it today you would earn a total of  128.00  from holding Adocia or generate 22.98% 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.  Adocia

Etablissements Maurel

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Etablissements Maurel et are ranked lower than 2 (%) 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.

Adocia

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Adocia are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Adocia sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Etablissements Maurel and Adocia

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

The idea behind Etablissements Maurel et and Adocia 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.