Correlation Between Compagnie Plastic and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and AMG Advanced 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 AMG Advanced 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 AMG Advanced Metallurgical, you can compare the effects of market volatilities on Compagnie Plastic and AMG Advanced 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 AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and AMG Advanced.
Diversification Opportunities for Compagnie Plastic and AMG Advanced
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Compagnie and AMG is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu 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 AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and AMG Advanced go up and down completely randomly.
Pair Corralation between Compagnie Plastic and AMG Advanced
Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to under-perform the AMG Advanced. In addition to that, Compagnie Plastic is 1.47 times more volatile than AMG Advanced Metallurgical. It trades about -0.2 of its total potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.24 per unit of volatility. If you would invest 1,608 in AMG Advanced Metallurgical on August 30, 2024 and sell it today you would lose (175.00) from holding AMG Advanced Metallurgical or give up 10.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| AMG Advanced Metallu |
Compagnie Plastic and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and AMG Advanced
The main advantage of trading using opposite Compagnie Plastic and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.| Compagnie Plastic vs. Lendinvest PLC | Compagnie Plastic vs. Neometals | Compagnie Plastic vs. Albion Technology General | Compagnie Plastic vs. Jupiter Fund Management |
| AMG Advanced vs. Lendinvest PLC | AMG Advanced vs. Neometals | AMG Advanced vs. Albion Technology General | AMG Advanced vs. Jupiter Fund Management |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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