Correlation Between Orege Socit and Eramet SA

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

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

Diversification Opportunities for Orege Socit and Eramet SA

0.02

Correlation Coefficient

Orege Socit  Eramet SA

Significant diversification

The 3 months correlation between Orege and Eramet is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Orege Socit Anonyme and Eramet SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eramet SA and Orege Socit 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 Orege Socit Anonyme are associated (or correlated) with Eramet SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eramet SA has no effect on the direction of Orege Socit i.e., Orege Socit and Eramet SA go up and down completely randomly.

Pair Corralation between Orege Socit and Eramet SA

Assuming the 90 days trading horizon Orege Socit Anonyme is expected to under-perform the Eramet SA. In addition to that, Orege Socit is 2.26 times more volatile than Eramet SA. It trades about 0.0 of its total potential returns per unit of risk. Eramet SA is currently generating about 0.12 per unit of volatility. If you would invest  4,918  in Eramet SA on April 25, 2025 and sell it today you would earn a total of  647.00  from holding Eramet SA or generate 13.16% return on investment over 90 days.

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

Orege Socit Anonyme  vs.  Eramet SA

Orege Socit Anonyme

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orege Socit Anonyme has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Orege Socit is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Eramet SA

Risk-Adjusted Performance

OK

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

Pair Trading with Orege Socit and Eramet SA

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

The idea behind Orege Socit Anonyme and Eramet 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..