Correlation Between Samse SA and EPC Groupe

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

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

Diversification Opportunities for Samse SA and EPC Groupe

-0.16

Correlation Coefficient

Samse SA  EPC Groupe

Good diversification

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

Pair Corralation between Samse SA and EPC Groupe

Assuming the 90 days trading horizon Samse SA is expected to under-perform the EPC Groupe. In addition to that, Samse SA is 1.24 times more volatile than EPC Groupe. It trades about -0.19 of its total potential returns per unit of risk. EPC Groupe is currently generating about 0.07 per unit of volatility. If you would invest  18,500  in EPC Groupe on September 14, 2024 and sell it today you would earn a total of  400.00  from holding EPC Groupe or generate 2.16% return on investment over 90 days.

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

Samse SA  vs.  EPC Groupe

Samse SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samse SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Samse SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

EPC Groupe

Risk-Adjusted Performance

2 of 100

OK

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.

Pair Trading with Samse SA and EPC Groupe

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

The idea behind Samse SA and EPC Groupe 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..