Correlation Between Eurazeo and Angus Energy

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

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

Diversification Opportunities for Eurazeo and Angus Energy

0.26

Correlation Coefficient

Eurazeo  Angus Energy

Modest diversification

The 3 months correlation between Eurazeo and Angus is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Eurazeo and Angus Energy PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angus Energy PLC and Eurazeo 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 Eurazeo are associated (or correlated) with Angus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angus Energy PLC has no effect on the direction of Eurazeo i.e., Eurazeo and Angus Energy go up and down completely randomly.

Pair Corralation between Eurazeo and Angus Energy

Assuming the 90 days trading horizon Eurazeo is expected to generate 0.27 times more return on investment than Angus Energy. However, Eurazeo is 3.77 times less risky than Angus Energy. It trades about 0.02 of its potential returns per unit of risk. Angus Energy PLC is currently generating about 0.0 per unit of risk. If you would invest  6,707  in Eurazeo on February 21, 2024 and sell it today you would earn a total of  908.00  from holding Eurazeo or generate 13.54% return on investment over 90 days.

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

Eurazeo  vs.  Angus Energy PLC

Eurazeo

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eurazeo are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Eurazeo is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Angus Energy PLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Angus Energy PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Angus Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eurazeo and Angus Energy

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

The idea behind Eurazeo and Angus Energy PLC 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.