Correlation Between Granite 3x and Compagnie
Can any of the company-specific risk be diversified away by investing in both Granite 3x and Compagnie 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 Granite 3x and Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite 3x LVMH and Compagnie du Cambodge, you can compare the effects of market volatilities on Granite 3x and Compagnie 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 Granite 3x with a short position of Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite 3x and Compagnie.
Diversification Opportunities for Granite 3x and Compagnie
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Granite and Compagnie is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Granite 3x LVMH and Compagnie du Cambodge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie du Cambodge and Granite 3x 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 Granite 3x LVMH are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie du Cambodge has no effect on the direction of Granite 3x i.e., Granite 3x and Compagnie go up and down completely randomly.
Pair Corralation between Granite 3x and Compagnie
Assuming the 90 days trading horizon Granite 3x LVMH is expected to under-perform the Compagnie. In addition to that, Granite 3x is 7.79 times more volatile than Compagnie du Cambodge. It trades about -0.14 of its total potential returns per unit of risk. Compagnie du Cambodge is currently generating about -0.22 per unit of volatility. If you would invest 9,850 in Compagnie du Cambodge on August 30, 2024 and sell it today you would lose (350.00) from holding Compagnie du Cambodge or give up 3.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Granite 3x LVMH vs. Compagnie du Cambodge
Performance |
| Timeline |
| Granite 3x LVMH |
| Compagnie du Cambodge |
Granite 3x and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite 3x and Compagnie
The main advantage of trading using opposite Granite 3x and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite 3x position performs unexpectedly, Compagnie 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 will offset losses from the drop in Compagnie's long position.| Granite 3x vs. Lyxor UCITS Japan | Granite 3x vs. Lyxor UCITS Japan | Granite 3x vs. Lyxor UCITS Stoxx | Granite 3x vs. Amundi CAC 40 |
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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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