Correlation Between Compagnie Plastic and Morgan Advanced
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Morgan 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 Morgan 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 Morgan Advanced Materials, you can compare the effects of market volatilities on Compagnie Plastic and Morgan 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 Morgan Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Morgan Advanced.
Diversification Opportunities for Compagnie Plastic and Morgan Advanced
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compagnie and Morgan is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Morgan Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Advanced Materials 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 Morgan Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Advanced Materials has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Morgan Advanced go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Morgan Advanced
Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to under-perform the Morgan Advanced. In addition to that, Compagnie Plastic is 1.51 times more volatile than Morgan Advanced Materials. It trades about -0.03 of its total potential returns per unit of risk. Morgan Advanced Materials is currently generating about 0.02 per unit of volatility. If you would invest 25,379 in Morgan Advanced Materials on September 4, 2024 and sell it today you would earn a total of 821.00 from holding Morgan Advanced Materials or generate 3.23% 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. Morgan Advanced Materials
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Morgan Advanced Materials |
Compagnie Plastic and Morgan Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Morgan Advanced
The main advantage of trading using opposite Compagnie Plastic and Morgan Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Morgan 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 Morgan Advanced will offset losses from the drop in Morgan Advanced'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 |
| Morgan Advanced vs. Caledonia Mining | Morgan Advanced vs. Kinnevik Investment AB | Morgan Advanced vs. Anglesey Mining | Morgan Advanced vs. Greenroc Mining PLC |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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