Correlation Between Compagnie Plastic and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Compagnie Plastic and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Dow Jones.
Diversification Opportunities for Compagnie Plastic and Dow Jones
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compagnie and Dow is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Dow Jones go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Dow Jones
Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to generate 4.81 times more return on investment than Dow Jones. However, Compagnie Plastic is 4.81 times more volatile than Dow Jones Industrial. It trades about 0.02 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.19 per unit of risk. If you would invest 1,100 in Compagnie Plastic Omnium on November 28, 2024 and sell it today you would earn a total of 2.00 from holding Compagnie Plastic Omnium or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Dow Jones Industrial
Performance |
| Timeline |
Compagnie Plastic and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Compagnie Plastic Omnium
Pair trading matchups for Compagnie Plastic
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Compagnie Plastic and Dow Jones
The main advantage of trading using opposite Compagnie Plastic and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Compagnie Plastic vs. Check Point Software | Compagnie Plastic vs. AMG Advanced Metallurgical | Compagnie Plastic vs. METALL ZUG AG | Compagnie Plastic vs. Automatic Data Processing |
| Dow Jones vs. Gladstone Investment | Dow Jones vs. BW Offshore Limited | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. Aperture Health |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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