Correlation Between EPC Groupe and NSE SA

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Can any of the company-specific risk be diversified away by investing in both EPC Groupe and NSE 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 EPC Groupe and NSE SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPC Groupe and NSE SA, you can compare the effects of market volatilities on EPC Groupe and NSE 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 EPC Groupe with a short position of NSE SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPC Groupe and NSE SA.

Diversification Opportunities for EPC Groupe and NSE SA

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between EPC and NSE is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding EPC Groupe and NSE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSE SA and EPC Groupe 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 EPC Groupe are associated (or correlated) with NSE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSE SA has no effect on the direction of EPC Groupe i.e., EPC Groupe and NSE SA go up and down completely randomly.

Pair Corralation between EPC Groupe and NSE SA

Assuming the 90 days trading horizon EPC Groupe is expected to generate 14.75 times less return on investment than NSE SA. But when comparing it to its historical volatility, EPC Groupe is 1.71 times less risky than NSE SA. It trades about 0.0 of its potential returns per unit of risk. NSE SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,474  in NSE SA on April 23, 2025 and sell it today you would earn a total of  186.00  from holding NSE SA or generate 4.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

EPC Groupe  vs.  NSE SA

 Performance 
       Timeline  
EPC Groupe 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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.
NSE SA 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in NSE SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, NSE SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

EPC Groupe and NSE SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EPC Groupe and NSE SA

The main advantage of trading using opposite EPC Groupe and NSE SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPC Groupe position performs unexpectedly, NSE 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 NSE SA will offset losses from the drop in NSE SA's long position.
The idea behind EPC Groupe and NSE 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.
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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