Correlation Between CHINA EDUCATION and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION and Compagnie Plastic 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 CHINA EDUCATION and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and Compagnie Plastic Omnium, you can compare the effects of market volatilities on CHINA EDUCATION and Compagnie Plastic 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 CHINA EDUCATION with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and Compagnie Plastic.
Diversification Opportunities for CHINA EDUCATION and Compagnie Plastic
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between CHINA and Compagnie is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium and CHINA EDUCATION 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 CHINA EDUCATION GROUP are associated (or correlated) with Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of CHINA EDUCATION i.e., CHINA EDUCATION and Compagnie Plastic go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and Compagnie Plastic
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the Compagnie Plastic. But the stock apears to be less risky and, when comparing its historical volatility, CHINA EDUCATION GROUP is 1.0 times less risky than Compagnie Plastic. The stock trades about -0.06 of its potential returns per unit of risk. The Compagnie Plastic Omnium is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 891.00 in Compagnie Plastic Omnium on September 15, 2024 and sell it today you would earn a total of 108.00 from holding Compagnie Plastic Omnium or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| Compagnie Plastic Omnium |
CHINA EDUCATION and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and Compagnie Plastic
The main advantage of trading using opposite CHINA EDUCATION and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION position performs unexpectedly, Compagnie Plastic 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 Plastic will offset losses from the drop in Compagnie Plastic's long position.| CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc |
| Compagnie Plastic vs. Eastman Chemical | Compagnie Plastic vs. Perdoceo Education | Compagnie Plastic vs. CHINA EDUCATION GROUP | Compagnie Plastic vs. CAREER EDUCATION |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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