Correlation Between Compagnie Financire and Boxer Retail
Can any of the company-specific risk be diversified away by investing in both Compagnie Financire and Boxer Retail 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 Financire and Boxer Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Financire Richemont and Boxer Retail, you can compare the effects of market volatilities on Compagnie Financire and Boxer Retail 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 Financire with a short position of Boxer Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Financire and Boxer Retail.
Diversification Opportunities for Compagnie Financire and Boxer Retail
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Compagnie and Boxer is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Financire Richemont and Boxer Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boxer Retail and Compagnie Financire 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 Financire Richemont are associated (or correlated) with Boxer Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boxer Retail has no effect on the direction of Compagnie Financire i.e., Compagnie Financire and Boxer Retail go up and down completely randomly.
Pair Corralation between Compagnie Financire and Boxer Retail
Assuming the 90 days trading horizon Compagnie Financire Richemont is expected to generate 1.69 times more return on investment than Boxer Retail. However, Compagnie Financire is 1.69 times more volatile than Boxer Retail. It trades about 0.36 of its potential returns per unit of risk. Boxer Retail is currently generating about 0.02 per unit of risk. If you would invest 28,336,000 in Compagnie Financire Richemont on November 3, 2024 and sell it today you would earn a total of 7,931,600 from holding Compagnie Financire Richemont or generate 27.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Financire Richemont vs. Boxer Retail
Performance |
| Timeline |
| Compagnie Financire |
| Boxer Retail |
Compagnie Financire and Boxer Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Financire and Boxer Retail
The main advantage of trading using opposite Compagnie Financire and Boxer Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Financire position performs unexpectedly, Boxer Retail 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 Boxer Retail will offset losses from the drop in Boxer Retail's long position.| Compagnie Financire vs. Advtech | Compagnie Financire vs. Hosken Consolidated Investments | Compagnie Financire vs. Zeder Investments | Compagnie Financire vs. Brimstone Investment |
| Boxer Retail vs. Blue Label Telecoms | Boxer Retail vs. Safari Investments RSA | Boxer Retail vs. Harmony Gold Mining | Boxer Retail vs. Deneb Investments |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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