Correlation Between Compagnie Financire and Bossard Holding
Can any of the company-specific risk be diversified away by investing in both Compagnie Financire and Bossard Holding 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 Bossard Holding 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 Bossard Holding AG, you can compare the effects of market volatilities on Compagnie Financire and Bossard Holding 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 Bossard Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Financire and Bossard Holding.
Diversification Opportunities for Compagnie Financire and Bossard Holding
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compagnie and Bossard is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Financire Richemont and Bossard Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bossard Holding AG 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 Bossard Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bossard Holding AG has no effect on the direction of Compagnie Financire i.e., Compagnie Financire and Bossard Holding go up and down completely randomly.
Pair Corralation between Compagnie Financire and Bossard Holding
Assuming the 90 days trading horizon Compagnie Financire Richemont is expected to generate 2.11 times more return on investment than Bossard Holding. However, Compagnie Financire is 2.11 times more volatile than Bossard Holding AG. It trades about 0.21 of its potential returns per unit of risk. Bossard Holding AG is currently generating about -0.04 per unit of risk. If you would invest 12,675 in Compagnie Financire Richemont on October 30, 2024 and sell it today you would earn a total of 4,560 from holding Compagnie Financire Richemont or generate 35.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.31% |
| Values | Daily Returns |
Compagnie Financire Richemont vs. Bossard Holding AG
Performance |
| Timeline |
| Compagnie Financire |
| Bossard Holding AG |
Compagnie Financire and Bossard Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Financire and Bossard Holding
The main advantage of trading using opposite Compagnie Financire and Bossard Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Financire position performs unexpectedly, Bossard Holding 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 Bossard Holding will offset losses from the drop in Bossard Holding's long position.| Compagnie Financire vs. Swatch Group AG | Compagnie Financire vs. Givaudan SA | Compagnie Financire vs. Zurich Insurance Group | Compagnie Financire vs. Novartis AG |
| Bossard Holding vs. VAT Group AG | Bossard Holding vs. Bucher Industries AG | Bossard Holding vs. EMS CHEMIE HOLDING AG | Bossard Holding vs. Komax Holding AG |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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