Correlation Between Compagnie Plastic and GlobalData PLC
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and GlobalData PLC 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 GlobalData PLC 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 GlobalData PLC, you can compare the effects of market volatilities on Compagnie Plastic and GlobalData PLC 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 GlobalData PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and GlobalData PLC.
Diversification Opportunities for Compagnie Plastic and GlobalData PLC
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compagnie and GlobalData is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData PLC 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 GlobalData PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalData PLC has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and GlobalData PLC go up and down completely randomly.
Pair Corralation between Compagnie Plastic and GlobalData PLC
Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to under-perform the GlobalData PLC. In addition to that, Compagnie Plastic is 1.18 times more volatile than GlobalData PLC. It trades about -0.02 of its total potential returns per unit of risk. GlobalData PLC is currently generating about 0.04 per unit of volatility. If you would invest 14,345 in GlobalData PLC on September 5, 2024 and sell it today you would earn a total of 5,955 from holding GlobalData PLC or generate 41.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. GlobalData PLC
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| GlobalData PLC |
Compagnie Plastic and GlobalData PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and GlobalData PLC
The main advantage of trading using opposite Compagnie Plastic and GlobalData PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, GlobalData PLC 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 GlobalData PLC will offset losses from the drop in GlobalData PLC's long position.| Compagnie Plastic vs. Samsung Electronics Co | Compagnie Plastic vs. Samsung Electronics Co | Compagnie Plastic vs. Hyundai Motor | Compagnie Plastic vs. Toyota Motor Corp |
| GlobalData PLC vs. Samsung Electronics Co | GlobalData PLC vs. Samsung Electronics Co | GlobalData PLC vs. Toyota Motor Corp | GlobalData PLC vs. Hon Hai Precision |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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