Correlation Between Compagnie Plastic and Saga Plc
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Saga 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 Saga 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 Saga plc, you can compare the effects of market volatilities on Compagnie Plastic and Saga 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 Saga Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Saga Plc.
Diversification Opportunities for Compagnie Plastic and Saga Plc
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Compagnie and Saga is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Saga plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga 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 Saga Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga plc has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Saga Plc go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Saga Plc
Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to under-perform the Saga Plc. In addition to that, Compagnie Plastic is 1.6 times more volatile than Saga plc. It trades about -0.05 of its total potential returns per unit of risk. Saga plc is currently generating about 0.04 per unit of volatility. If you would invest 11,240 in Saga plc on September 1, 2024 and sell it today you would earn a total of 140.00 from holding Saga plc or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Saga plc
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Saga plc |
Compagnie Plastic and Saga Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Saga Plc
The main advantage of trading using opposite Compagnie Plastic and Saga Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Saga 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 Saga Plc will offset losses from the drop in Saga Plc's long position.| Compagnie Plastic vs. Uniper SE | Compagnie Plastic vs. Mulberry Group PLC | Compagnie Plastic vs. London Security Plc | Compagnie Plastic vs. Triad Group PLC |
| Saga Plc vs. BE Semiconductor Industries | Saga Plc vs. Morgan Advanced Materials | Saga Plc vs. Compagnie Plastic Omnium | Saga Plc vs. Cars Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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