Correlation Between Compagnie and Argen X
Can any of the company-specific risk be diversified away by investing in both Compagnie and Argen X 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 Argen X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie d Entreprises and Argen X, you can compare the effects of market volatilities on Compagnie and Argen X 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 Argen X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Argen X.
Diversification Opportunities for Compagnie and Argen X
Pay attention - limited upside
The 3 months correlation between Compagnie and Argen is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie d Entreprises and Argen X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argen X 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 d Entreprises are associated (or correlated) with Argen X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argen X has no effect on the direction of Compagnie i.e., Compagnie and Argen X go up and down completely randomly.
Pair Corralation between Compagnie and Argen X
Assuming the 90 days trading horizon Compagnie d Entreprises is expected to under-perform the Argen X. But the stock apears to be less risky and, when comparing its historical volatility, Compagnie d Entreprises is 1.94 times less risky than Argen X. The stock trades about -0.04 of its potential returns per unit of risk. The Argen X is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 40,740 in Argen X on August 26, 2024 and sell it today you would earn a total of 17,520 from holding Argen X or generate 43.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie d Entreprises vs. Argen X
Performance |
| Timeline |
| Compagnie d Entreprises |
| Argen X |
Compagnie and Argen X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Argen X
The main advantage of trading using opposite Compagnie and Argen X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Argen X 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 Argen X will offset losses from the drop in Argen X's long position.| Compagnie vs. NV Bekaert SA | Compagnie vs. Tessenderlo | Compagnie vs. Barco NV | Compagnie vs. EVS Broadcast Equipment |
| Argen X vs. EVS Broadcast Equipment | Argen X vs. NV Bekaert SA | Argen X vs. Melexis NV | Argen X vs. Barco NV |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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