Correlation Between Compagnie and Deceuninck
Can any of the company-specific risk be diversified away by investing in both Compagnie and Deceuninck 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 Deceuninck 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 Deceuninck, you can compare the effects of market volatilities on Compagnie and Deceuninck 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 Deceuninck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Deceuninck.
Diversification Opportunities for Compagnie and Deceuninck
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Compagnie and Deceuninck is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie d Entreprises and Deceuninck in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deceuninck 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 Deceuninck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deceuninck has no effect on the direction of Compagnie i.e., Compagnie and Deceuninck go up and down completely randomly.
Pair Corralation between Compagnie and Deceuninck
Assuming the 90 days trading horizon Compagnie d Entreprises is expected to under-perform the Deceuninck. But the stock apears to be less risky and, when comparing its historical volatility, Compagnie d Entreprises is 1.11 times less risky than Deceuninck. The stock trades about -0.13 of its potential returns per unit of risk. The Deceuninck is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 246.00 in Deceuninck on September 2, 2024 and sell it today you would lose (15.00) from holding Deceuninck or give up 6.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie d Entreprises vs. Deceuninck
Performance |
| Timeline |
| Compagnie d Entreprises |
| Deceuninck |
Compagnie and Deceuninck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Deceuninck
The main advantage of trading using opposite Compagnie and Deceuninck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Deceuninck 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 Deceuninck will offset losses from the drop in Deceuninck's long position.| Compagnie vs. Ackermans Van Haaren | Compagnie vs. NV Bekaert SA | Compagnie vs. Melexis NV | Compagnie vs. DIeteren Group SA |
| Deceuninck vs. Campine | Deceuninck vs. Miko NV | Deceuninck vs. Tessenderlo | Deceuninck vs. Care Property Invest |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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