Correlation Between Bridgestone and Compagnie Generale
Can any of the company-specific risk be diversified away by investing in both Bridgestone and Compagnie Generale 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 Bridgestone and Compagnie Generale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgestone and Compagnie Generale des, you can compare the effects of market volatilities on Bridgestone and Compagnie Generale 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 Bridgestone with a short position of Compagnie Generale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgestone and Compagnie Generale.
Diversification Opportunities for Bridgestone and Compagnie Generale
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bridgestone and Compagnie is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bridgestone and Compagnie Generale des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Generale des and Bridgestone 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 Bridgestone are associated (or correlated) with Compagnie Generale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Generale des has no effect on the direction of Bridgestone i.e., Bridgestone and Compagnie Generale go up and down completely randomly.
Pair Corralation between Bridgestone and Compagnie Generale
Assuming the 90 days horizon Bridgestone is expected to under-perform the Compagnie Generale. In addition to that, Bridgestone is 3.98 times more volatile than Compagnie Generale des. It trades about -0.01 of its total potential returns per unit of risk. Compagnie Generale des is currently generating about 0.01 per unit of volatility. If you would invest 1,622 in Compagnie Generale des on August 27, 2024 and sell it today you would lose (4.00) from holding Compagnie Generale des or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 69.76% |
| Values | Daily Returns |
Bridgestone vs. Compagnie Generale des
Performance |
| Timeline |
| Bridgestone |
| Compagnie Generale des |
Bridgestone and Compagnie Generale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgestone and Compagnie Generale
The main advantage of trading using opposite Bridgestone and Compagnie Generale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgestone position performs unexpectedly, Compagnie Generale 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 Generale will offset losses from the drop in Compagnie Generale's long position.| Bridgestone vs. Compagnie Gnrale des | Bridgestone vs. Continental AG PK | Bridgestone vs. Bridgestone Corp ADR | Bridgestone vs. Continental Aktiengesellschaft |
| Compagnie Generale vs. Allison Transmission Holdings | Compagnie Generale vs. Luminar Technologies | Compagnie Generale vs. Lear Corporation | Compagnie Generale vs. BorgWarner |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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