Correlation Between Broadpeak and Cogelec SA
Can any of the company-specific risk be diversified away by investing in both Broadpeak and Cogelec SA 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 Broadpeak and Cogelec SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadpeak SA and Cogelec SA, you can compare the effects of market volatilities on Broadpeak and Cogelec SA 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 Broadpeak with a short position of Cogelec SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadpeak and Cogelec SA.
Diversification Opportunities for Broadpeak and Cogelec SA
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Broadpeak and Cogelec is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding Broadpeak SA and Cogelec SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogelec SA and Broadpeak 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 Broadpeak SA are associated (or correlated) with Cogelec SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogelec SA has no effect on the direction of Broadpeak i.e., Broadpeak and Cogelec SA go up and down completely randomly.
Pair Corralation between Broadpeak and Cogelec SA
Assuming the 90 days trading horizon Broadpeak SA is expected to under-perform the Cogelec SA. In addition to that, Broadpeak is 1.29 times more volatile than Cogelec SA. It trades about -0.18 of its total potential returns per unit of risk. Cogelec SA is currently generating about 0.22 per unit of volatility. If you would invest 936.00 in Cogelec SA on August 24, 2024 and sell it today you would earn a total of 674.00 from holding Cogelec SA or generate 72.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadpeak SA vs. Cogelec SA
Performance |
| Timeline |
| Broadpeak SA |
| Cogelec SA |
Broadpeak and Cogelec SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadpeak and Cogelec SA
The main advantage of trading using opposite Broadpeak and Cogelec SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadpeak position performs unexpectedly, Cogelec SA 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 Cogelec SA will offset losses from the drop in Cogelec SA's long position.The idea behind Broadpeak SA and Cogelec SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cogelec SA vs. Acheter Louer | Cogelec SA vs. Europlasma SA | Cogelec SA vs. DBT SA | Cogelec SA vs. Solocal Group SA |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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