Correlation Between Pepco Group and E Shopping
Can any of the company-specific risk be diversified away by investing in both Pepco Group and E Shopping 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 Pepco Group and E Shopping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pepco Group BV and E shopping Group SA, you can compare the effects of market volatilities on Pepco Group and E Shopping 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 Pepco Group with a short position of E Shopping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pepco Group and E Shopping.
Diversification Opportunities for Pepco Group and E Shopping
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pepco and ESG is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pepco Group BV and E shopping Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E shopping Group and Pepco Group 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 Pepco Group BV are associated (or correlated) with E Shopping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E shopping Group has no effect on the direction of Pepco Group i.e., Pepco Group and E Shopping go up and down completely randomly.
Pair Corralation between Pepco Group and E Shopping
Assuming the 90 days trading horizon Pepco Group BV is expected to generate 0.31 times more return on investment than E Shopping. However, Pepco Group BV is 3.23 times less risky than E Shopping. It trades about -0.12 of its potential returns per unit of risk. E shopping Group SA is currently generating about -0.16 per unit of risk. If you would invest 1,982 in Pepco Group BV on September 26, 2024 and sell it today you would lose (348.00) from holding Pepco Group BV or give up 17.56% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 85.48% |
Values | Daily Returns |
Pepco Group BV vs. E shopping Group SA
Performance |
Timeline |
Pepco Group BV |
E shopping Group |
Pepco Group and E Shopping Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pepco Group and E Shopping
The main advantage of trading using opposite Pepco Group and E Shopping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pepco Group position performs unexpectedly, E Shopping 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 E Shopping will offset losses from the drop in E Shopping's long position.Pepco Group vs. Quantum Software SA | Pepco Group vs. Movie Games SA | Pepco Group vs. PLAYWAY SA | Pepco Group vs. Road Studio SA |
E Shopping vs. Banco Santander SA | E Shopping vs. UniCredit SpA | E Shopping vs. CEZ as | E Shopping vs. Polski Koncern Naftowy |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |