Correlation Between Compagnie Plastic and RTW Venture
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and RTW Venture 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 RTW Venture 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 RTW Venture Fund, you can compare the effects of market volatilities on Compagnie Plastic and RTW Venture 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 RTW Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and RTW Venture.
Diversification Opportunities for Compagnie Plastic and RTW Venture
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Compagnie and RTW is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and RTW Venture Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTW Venture Fund 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 RTW Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTW Venture Fund has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and RTW Venture go up and down completely randomly.
Pair Corralation between Compagnie Plastic and RTW Venture
Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to generate 3.15 times more return on investment than RTW Venture. However, Compagnie Plastic is 3.15 times more volatile than RTW Venture Fund. It trades about 0.15 of its potential returns per unit of risk. RTW Venture Fund is currently generating about -0.11 per unit of risk. If you would invest 907.00 in Compagnie Plastic Omnium on September 13, 2024 and sell it today you would earn a total of 88.00 from holding Compagnie Plastic Omnium or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. RTW Venture Fund
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| RTW Venture Fund |
Compagnie Plastic and RTW Venture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and RTW Venture
The main advantage of trading using opposite Compagnie Plastic and RTW Venture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, RTW Venture 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 RTW Venture will offset losses from the drop in RTW Venture's long position.| Compagnie Plastic vs. Infrastrutture Wireless Italiane | Compagnie Plastic vs. Eastman Chemical Co | Compagnie Plastic vs. Verizon Communications | Compagnie Plastic vs. Bellevue Healthcare Trust |
| RTW Venture vs. Optima Health plc | RTW Venture vs. AMG Advanced Metallurgical | RTW Venture vs. Martin Marietta Materials | RTW Venture vs. Compagnie Plastic Omnium |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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