Correlation Between ADRIATIC METALS and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS 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 ADRIATIC METALS and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and Compagnie Plastic Omnium, you can compare the effects of market volatilities on ADRIATIC METALS 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 ADRIATIC METALS with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and Compagnie Plastic.
Diversification Opportunities for ADRIATIC METALS and Compagnie Plastic
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ADRIATIC and Compagnie is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 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 ADRIATIC METALS 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 ADRIATIC METALS LS 013355 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 ADRIATIC METALS i.e., ADRIATIC METALS and Compagnie Plastic go up and down completely randomly.
Pair Corralation between ADRIATIC METALS and Compagnie Plastic
Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to generate 1.43 times more return on investment than Compagnie Plastic. However, ADRIATIC METALS is 1.43 times more volatile than Compagnie Plastic Omnium. It trades about 0.03 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.03 per unit of risk. If you would invest 195.00 in ADRIATIC METALS LS 013355 on August 26, 2024 and sell it today you would earn a total of 45.00 from holding ADRIATIC METALS LS 013355 or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADRIATIC METALS LS 013355 vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| ADRIATIC METALS LS |
| Compagnie Plastic Omnium |
ADRIATIC METALS and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADRIATIC METALS and Compagnie Plastic
The main advantage of trading using opposite ADRIATIC METALS and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS 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.| ADRIATIC METALS vs. Mineral Resources Limited | ADRIATIC METALS vs. Superior Plus Corp | ADRIATIC METALS vs. NMI Holdings | ADRIATIC METALS vs. Origin Agritech |
| Compagnie Plastic vs. PT Astra International | Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings | Compagnie Plastic vs. Origin Agritech |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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