Correlation Between Compagnie Plastic and Virgin Wines
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Virgin Wines 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 Virgin Wines 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 Virgin Wines UK, you can compare the effects of market volatilities on Compagnie Plastic and Virgin Wines 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 Virgin Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Virgin Wines.
Diversification Opportunities for Compagnie Plastic and Virgin Wines
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compagnie and Virgin is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Virgin Wines UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Wines UK 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 Virgin Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Wines UK has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Virgin Wines go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Virgin Wines
Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to generate 1.08 times more return on investment than Virgin Wines. However, Compagnie Plastic is 1.08 times more volatile than Virgin Wines UK. It trades about 0.35 of its potential returns per unit of risk. Virgin Wines UK is currently generating about -0.17 per unit of risk. If you would invest 837.00 in Compagnie Plastic Omnium on September 24, 2024 and sell it today you would earn a total of 133.00 from holding Compagnie Plastic Omnium or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Virgin Wines UK
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Virgin Wines UK |
Compagnie Plastic and Virgin Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Virgin Wines
The main advantage of trading using opposite Compagnie Plastic and Virgin Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Virgin Wines 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 Virgin Wines will offset losses from the drop in Virgin Wines' long position.| Compagnie Plastic vs. Hollywood Bowl Group | Compagnie Plastic vs. AcadeMedia AB | Compagnie Plastic vs. Porvair plc | Compagnie Plastic vs. LBG Media PLC |
| Virgin Wines vs. Samsung Electronics Co | Virgin Wines vs. Samsung Electronics Co | Virgin Wines vs. Hyundai Motor | Virgin Wines vs. Toyota Motor Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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