Correlation Between Compagnie and ST Dupont
Can any of the company-specific risk be diversified away by investing in both Compagnie and ST Dupont 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 Compagnie and ST Dupont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie du Cambodge and ST Dupont, you can compare the effects of market volatilities on Compagnie and ST Dupont 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 Compagnie with a short position of ST Dupont. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and ST Dupont.
Diversification Opportunities for Compagnie and ST Dupont
Very good diversification
The 3 months correlation between Compagnie and DPT is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie du Cambodge and ST Dupont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ST Dupont and Compagnie 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 Compagnie du Cambodge are associated (or correlated) with ST Dupont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ST Dupont has no effect on the direction of Compagnie i.e., Compagnie and ST Dupont go up and down completely randomly.
Pair Corralation between Compagnie and ST Dupont
Assuming the 90 days trading horizon Compagnie du Cambodge is expected to generate 148.72 times more return on investment than ST Dupont. However, Compagnie is 148.72 times more volatile than ST Dupont. It trades about 0.35 of its potential returns per unit of risk. ST Dupont is currently generating about 0.21 per unit of risk. If you would invest 7,650 in Compagnie du Cambodge on September 2, 2024 and sell it today you would earn a total of 1,850 from holding Compagnie du Cambodge or generate 24.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.48% |
| Values | Daily Returns |
Compagnie du Cambodge vs. ST Dupont
Performance |
| Timeline |
| Compagnie du Cambodge |
| ST Dupont |
Compagnie and ST Dupont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and ST Dupont
The main advantage of trading using opposite Compagnie and ST Dupont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, ST Dupont 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 ST Dupont will offset losses from the drop in ST Dupont's long position.| Compagnie vs. Manitou BF SA | Compagnie vs. Ossiam Minimum Variance | Compagnie vs. Granite 3x LVMH | Compagnie vs. 21Shares Polkadot ETP |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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