Correlation Between CDL INVESTMENT and Gestamp Automocin
Can any of the company-specific risk be diversified away by investing in both CDL INVESTMENT and Gestamp Automocin 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 CDL INVESTMENT and Gestamp Automocin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDL INVESTMENT and Gestamp Automocin SA, you can compare the effects of market volatilities on CDL INVESTMENT and Gestamp Automocin 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 CDL INVESTMENT with a short position of Gestamp Automocin. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDL INVESTMENT and Gestamp Automocin.
Diversification Opportunities for CDL INVESTMENT and Gestamp Automocin
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CDL and Gestamp is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT and Gestamp Automocin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gestamp Automocin and CDL INVESTMENT 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 CDL INVESTMENT are associated (or correlated) with Gestamp Automocin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gestamp Automocin has no effect on the direction of CDL INVESTMENT i.e., CDL INVESTMENT and Gestamp Automocin go up and down completely randomly.
Pair Corralation between CDL INVESTMENT and Gestamp Automocin
Assuming the 90 days trading horizon CDL INVESTMENT is expected to generate 0.99 times more return on investment than Gestamp Automocin. However, CDL INVESTMENT is 1.01 times less risky than Gestamp Automocin. It trades about 0.03 of its potential returns per unit of risk. Gestamp Automocin SA is currently generating about -0.03 per unit of risk. If you would invest 38.00 in CDL INVESTMENT on September 14, 2024 and sell it today you would earn a total of 5.00 from holding CDL INVESTMENT or generate 13.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDL INVESTMENT vs. Gestamp Automocin SA
Performance |
| Timeline |
| CDL INVESTMENT |
| Gestamp Automocin |
CDL INVESTMENT and Gestamp Automocin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDL INVESTMENT and Gestamp Automocin
The main advantage of trading using opposite CDL INVESTMENT and Gestamp Automocin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDL INVESTMENT position performs unexpectedly, Gestamp Automocin 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 Gestamp Automocin will offset losses from the drop in Gestamp Automocin's long position.| CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc |
| Gestamp Automocin vs. Axcelis Technologies | Gestamp Automocin vs. SOFI TECHNOLOGIES | Gestamp Automocin vs. Japan Asia Investment | Gestamp Automocin vs. CDL INVESTMENT |
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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