Correlation Between Compagnie Plastic and United States
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and United States 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 States 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 States Steel, you can compare the effects of market volatilities on Compagnie Plastic and United States 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 States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and United States.
Diversification Opportunities for Compagnie Plastic and United States
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Compagnie and United is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and United States go up and down completely randomly.
Pair Corralation between Compagnie Plastic and United States
Assuming the 90 days trading horizon Compagnie Plastic is expected to generate 4.16 times less return on investment than United States. But when comparing it to its historical volatility, Compagnie Plastic Omnium is 1.5 times less risky than United States. It trades about 0.02 of its potential returns per unit of risk. United States Steel is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,602 in United States Steel on September 3, 2024 and sell it today you would earn a total of 457.00 from holding United States Steel or generate 12.69% 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 States Steel
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| United States Steel |
Compagnie Plastic and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and United States
The main advantage of trading using opposite Compagnie Plastic and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, United States 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 States will offset losses from the drop in United States' long position.| Compagnie Plastic vs. Catalyst Media Group | Compagnie Plastic vs. CATLIN GROUP | Compagnie Plastic vs. Tamburi Investment Partners | Compagnie Plastic vs. Magnora ASA |
| United States vs. Catalyst Media Group | United States vs. CATLIN GROUP | United States vs. Tamburi Investment Partners | United States vs. Magnora ASA |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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