Correlation Between Cogelec SA and Ekinops SA

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

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

Diversification Opportunities for Cogelec SA and Ekinops SA

0.55

Correlation Coefficient

Cogelec SA  Ekinops SA

Very weak diversification

The 3 months correlation between Cogelec and Ekinops is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cogelec SA and Ekinops SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekinops SA and Cogelec 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 Cogelec SA are associated (or correlated) with Ekinops SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekinops SA has no effect on the direction of Cogelec SA i.e., Cogelec SA and Ekinops SA go up and down completely randomly.

Pair Corralation between Cogelec SA and Ekinops SA

Assuming the 90 days trading horizon Cogelec SA is expected to generate 0.72 times more return on investment than Ekinops SA. However, Cogelec SA is 1.38 times less risky than Ekinops SA. It trades about 0.19 of its potential returns per unit of risk. Ekinops SA is currently generating about 0.12 per unit of risk. If you would invest  2,140  in Cogelec SA on April 24, 2025 and sell it today you would earn a total of  750.00  from holding Cogelec SA or generate 35.05% return on investment over 90 days.

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

Cogelec SA  vs.  Ekinops SA

Cogelec SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cogelec SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Cogelec SA reported solid returns over the last few months and may actually be approaching a breakup point.

Ekinops SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ekinops SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Ekinops SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cogelec SA and Ekinops SA

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

The idea behind Cogelec SA and Ekinops 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 Transaction History module to view history of all your transactions and understand their impact on performance.