Correlation Between Europlasma and Gaussin

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

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

Diversification Opportunities for Europlasma and Gaussin

0.6

Correlation Coefficient

Europlasma  Gaussin

Poor diversification

The 3 months correlation between Europlasma and Gaussin is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Europlasma SA and Gaussin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaussin and Europlasma 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 Europlasma SA are associated (or correlated) with Gaussin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaussin has no effect on the direction of Europlasma i.e., Europlasma and Gaussin go up and down completely randomly.

Pair Corralation between Europlasma and Gaussin

Assuming the 90 days trading horizon Europlasma SA is expected to under-perform the Gaussin. In addition to that, Europlasma is 4.31 times more volatile than Gaussin. It trades about -0.04 of its total potential returns per unit of risk. Gaussin is currently generating about -0.08 per unit of volatility. If you would invest  410.00  in Gaussin on February 4, 2024 and sell it today you would lose (386.00) from holding Gaussin or give up 94.15% of portfolio value over 90 days.

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

Europlasma SA  vs.  Gaussin

Europlasma SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Europlasma 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.

Gaussin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gaussin 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.

Pair Trading with Europlasma and Gaussin

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

The idea behind Europlasma SA and Gaussin 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.