Correlation Between Antin IP and Eurazeo

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

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

Diversification Opportunities for Antin IP and Eurazeo

-0.72

Correlation Coefficient

Antin IP  Eurazeo

Pay attention - limited upside

The 3 months correlation between Antin and Eurazeo is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Antin IP SA and Eurazeo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurazeo and Antin IP 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 Antin IP SA are associated (or correlated) with Eurazeo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurazeo has no effect on the direction of Antin IP i.e., Antin IP and Eurazeo go up and down completely randomly.

Pair Corralation between Antin IP and Eurazeo

Assuming the 90 days trading horizon Antin IP SA is expected to under-perform the Eurazeo. In addition to that, Antin IP is 1.15 times more volatile than Eurazeo. It trades about -0.15 of its total potential returns per unit of risk. Eurazeo is currently generating about 0.21 per unit of volatility. If you would invest  7,960  in Eurazeo on February 5, 2024 and sell it today you would earn a total of  590.00  from holding Eurazeo or generate 7.41% return on investment over 90 days.

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

Antin IP SA  vs.  Eurazeo

Antin IP SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antin IP SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Eurazeo

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eurazeo are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Eurazeo may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Antin IP and Eurazeo

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

The idea behind Antin IP SA and Eurazeo 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.