Correlation Between Baikowski SASU and EPC Groupe

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

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

Diversification Opportunities for Baikowski SASU and EPC Groupe

-0.46

Correlation Coefficient

Baikowski SASU  EPC Groupe

Very good diversification

The 3 months correlation between Baikowski and EPC is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Baikowski SASU and EPC Groupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPC Groupe and Baikowski SASU 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 Baikowski SASU 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 Baikowski SASU i.e., Baikowski SASU and EPC Groupe go up and down completely randomly.

Pair Corralation between Baikowski SASU and EPC Groupe

Assuming the 90 days trading horizon Baikowski SASU is expected to generate 1.71 times more return on investment than EPC Groupe. However, Baikowski SASU is 1.71 times more volatile than EPC Groupe. It trades about 0.14 of its potential returns per unit of risk. EPC Groupe is currently generating about -0.01 per unit of risk. If you would invest  1,519  in Baikowski SASU on April 24, 2025 and sell it today you would earn a total of  501.00  from holding Baikowski SASU or generate 32.98% return on investment over 90 days.

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

Baikowski SASU  vs.  EPC Groupe

Baikowski SASU

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Baikowski SASU are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Baikowski SASU reported solid returns over the last few months and may actually be approaching a breakup point.

EPC Groupe

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Baikowski SASU and EPC Groupe

The main advantage of trading using opposite Baikowski SASU and EPC Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baikowski SASU 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 Baikowski SASU 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.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.