Correlation Between Compagnie Plastic and United Internet
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and United Internet 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 Compagnie Plastic and United Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and United Internet AG, you can compare the effects of market volatilities on Compagnie Plastic and United Internet 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 Compagnie Plastic with a short position of United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and United Internet.
Diversification Opportunities for Compagnie Plastic and United Internet
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Compagnie and United is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet AG and Compagnie Plastic 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 Compagnie Plastic Omnium are associated (or correlated) with United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and United Internet go up and down completely randomly.
Pair Corralation between Compagnie Plastic and United Internet
Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to generate 1.37 times more return on investment than United Internet. However, Compagnie Plastic is 1.37 times more volatile than United Internet AG. It trades about 0.11 of its potential returns per unit of risk. United Internet AG is currently generating about -0.09 per unit of risk. If you would invest 815.00 in Compagnie Plastic Omnium on September 12, 2024 and sell it today you would earn a total of 180.00 from holding Compagnie Plastic Omnium or generate 22.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. United Internet AG
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| United Internet AG |
Compagnie Plastic and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and United Internet
The main advantage of trading using opposite Compagnie Plastic and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.| Compagnie Plastic vs. Infrastrutture Wireless Italiane | Compagnie Plastic vs. Eastman Chemical Co | Compagnie Plastic vs. Verizon Communications | Compagnie Plastic vs. Bellevue Healthcare Trust |
| United Internet vs. Samsung Electronics Co | United Internet vs. Samsung Electronics Co | United Internet vs. Hyundai Motor | United Internet vs. Reliance Industries Ltd |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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