Correlation Between Seche Environnement and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Seche Environnement and Compagnie Plastic 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 Seche Environnement and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seche Environnement SA and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Seche Environnement and Compagnie Plastic 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 Seche Environnement with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnement and Compagnie Plastic.
Diversification Opportunities for Seche Environnement and Compagnie Plastic
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seche and Compagnie is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium and Seche Environnement 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 Seche Environnement SA are associated (or correlated) with Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Seche Environnement i.e., Seche Environnement and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Seche Environnement and Compagnie Plastic
Assuming the 90 days trading horizon Seche Environnement is expected to generate 1.53 times less return on investment than Compagnie Plastic. But when comparing it to its historical volatility, Seche Environnement SA is 1.01 times less risky than Compagnie Plastic. It trades about 0.09 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,003 in Compagnie Plastic Omnium on November 1, 2024 and sell it today you would earn a total of 74.00 from holding Compagnie Plastic Omnium or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seche Environnement SA vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Seche Environnement |
| Compagnie Plastic Omnium |
Seche Environnement and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seche Environnement and Compagnie Plastic
The main advantage of trading using opposite Seche Environnement and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnement position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Seche Environnement vs. Berkshire Hathaway | Seche Environnement vs. Samsung Electronics Co | Seche Environnement vs. Samsung Electronics Co | Seche Environnement vs. Chocoladefabriken Lindt Spruengli |
| Compagnie Plastic vs. Ubisoft Entertainment | Compagnie Plastic vs. JD Sports Fashion | Compagnie Plastic vs. Seche Environnement SA | Compagnie Plastic vs. Air Products Chemicals |
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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