Correlation Between Compagnie Plastic and Weiss Korea
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Weiss Korea 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 Weiss Korea 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 Weiss Korea Opportunity, you can compare the effects of market volatilities on Compagnie Plastic and Weiss Korea 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 Weiss Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Weiss Korea.
Diversification Opportunities for Compagnie Plastic and Weiss Korea
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compagnie and Weiss is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Weiss Korea Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiss Korea Opportunity 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 Weiss Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiss Korea Opportunity has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Weiss Korea go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Weiss Korea
Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to under-perform the Weiss Korea. In addition to that, Compagnie Plastic is 1.82 times more volatile than Weiss Korea Opportunity. It trades about -0.01 of its total potential returns per unit of risk. Weiss Korea Opportunity is currently generating about 0.0 per unit of volatility. If you would invest 16,960 in Weiss Korea Opportunity on September 19, 2024 and sell it today you would lose (1,233) from holding Weiss Korea Opportunity or give up 7.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Weiss Korea Opportunity
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Weiss Korea Opportunity |
Compagnie Plastic and Weiss Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Weiss Korea
The main advantage of trading using opposite Compagnie Plastic and Weiss Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Weiss Korea 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 Weiss Korea will offset losses from the drop in Weiss Korea's long position.| Compagnie Plastic vs. Intermediate Capital Group | Compagnie Plastic vs. Empire Metals Limited | Compagnie Plastic vs. LBG Media PLC | Compagnie Plastic vs. Centaur Media |
| Weiss Korea vs. Compagnie Plastic Omnium | Weiss Korea vs. Amedeo Air Four | Weiss Korea vs. CleanTech Lithium plc | Weiss Korea vs. Applied Materials |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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