Correlation Between Bridgestone Corp and Compagnie Generale
Can any of the company-specific risk be diversified away by investing in both Bridgestone Corp 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 Corp 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 Corp ADR and Compagnie Generale des, you can compare the effects of market volatilities on Bridgestone Corp 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 Corp with a short position of Compagnie Generale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgestone Corp and Compagnie Generale.
Diversification Opportunities for Bridgestone Corp and Compagnie Generale
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bridgestone and Compagnie is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bridgestone Corp ADR 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 Corp 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 Corp ADR 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 Corp i.e., Bridgestone Corp and Compagnie Generale go up and down completely randomly.
Pair Corralation between Bridgestone Corp and Compagnie Generale
Assuming the 90 days horizon Bridgestone Corp ADR is expected to generate 1.09 times more return on investment than Compagnie Generale. However, Bridgestone Corp is 1.09 times more volatile than Compagnie Generale des. It trades about -0.13 of its potential returns per unit of risk. Compagnie Generale des is currently generating about -0.16 per unit of risk. If you would invest 1,801 in Bridgestone Corp ADR on August 30, 2024 and sell it today you would lose (59.00) from holding Bridgestone Corp ADR or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bridgestone Corp ADR vs. Compagnie Generale des
Performance |
| Timeline |
| Bridgestone Corp ADR |
| Compagnie Generale des |
Bridgestone Corp and Compagnie Generale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgestone Corp and Compagnie Generale
The main advantage of trading using opposite Bridgestone Corp and Compagnie Generale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgestone Corp 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 Corp vs. Continental AG PK | Bridgestone Corp vs. Compagnie Generale des | Bridgestone Corp vs. Denso Corp ADR | Bridgestone Corp vs. Subaru Corp ADR |
| Compagnie Generale vs. Continental Aktiengesellschaft | Compagnie Generale vs. Bridgestone Corp ADR | Compagnie Generale vs. Goodyear Tire Rubber | Compagnie Generale vs. Brembo SpA |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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