Correlation Between Ercros and Tubacex SA

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

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

Diversification Opportunities for Ercros and Tubacex SA

-0.07

Correlation Coefficient

Ercros  Tubacex SA

Good diversification

The 3 months correlation between Ercros and Tubacex is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ercros and Tubacex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tubacex SA and Ercros 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 Ercros are associated (or correlated) with Tubacex SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tubacex SA has no effect on the direction of Ercros i.e., Ercros and Tubacex SA go up and down completely randomly.

Pair Corralation between Ercros and Tubacex SA

Assuming the 90 days trading horizon Ercros is expected to generate 1.38 times less return on investment than Tubacex SA. But when comparing it to its historical volatility, Ercros is 1.62 times less risky than Tubacex SA. It trades about 0.04 of its potential returns per unit of risk. Tubacex SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  360.00  in Tubacex SA on April 24, 2025 and sell it today you would earn a total of  11.00  from holding Tubacex SA or generate 3.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Ercros  vs.  Tubacex SA

Ercros

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ercros are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Ercros is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Tubacex SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tubacex SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Tubacex SA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ercros and Tubacex SA

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

The idea behind Ercros and Tubacex 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.