Correlation Between CBO Territoria and IDI SCA
Can any of the company-specific risk be diversified away by investing in both CBO Territoria and IDI SCA 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 CBO Territoria and IDI SCA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBO Territoria SA and IDI SCA, you can compare the effects of market volatilities on CBO Territoria and IDI SCA 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 CBO Territoria with a short position of IDI SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBO Territoria and IDI SCA.
Diversification Opportunities for CBO Territoria and IDI SCA
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CBO and IDI is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding CBO Territoria SA and IDI SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDI SCA and CBO Territoria 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 CBO Territoria SA are associated (or correlated) with IDI SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDI SCA has no effect on the direction of CBO Territoria i.e., CBO Territoria and IDI SCA go up and down completely randomly.
Pair Corralation between CBO Territoria and IDI SCA
Assuming the 90 days trading horizon CBO Territoria SA is expected to generate 0.5 times more return on investment than IDI SCA. However, CBO Territoria SA is 2.01 times less risky than IDI SCA. It trades about -0.04 of its potential returns per unit of risk. IDI SCA is currently generating about -0.07 per unit of risk. If you would invest 361.00 in CBO Territoria SA on August 28, 2024 and sell it today you would lose (3.00) from holding CBO Territoria SA or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBO Territoria SA vs. IDI SCA
Performance |
| Timeline |
| CBO Territoria SA |
| IDI SCA |
CBO Territoria and IDI SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBO Territoria and IDI SCA
The main advantage of trading using opposite CBO Territoria and IDI SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBO Territoria position performs unexpectedly, IDI SCA 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 IDI SCA will offset losses from the drop in IDI SCA's long position.| CBO Territoria vs. Fonciere Lyonnaise | CBO Territoria vs. Immobiliere Dassault SA | CBO Territoria vs. Frey SA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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