Correlation Between CME and Plano Plano
Can any of the company-specific risk be diversified away by investing in both CME and Plano Plano 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 CME and Plano Plano into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CME Group and Plano Plano Desenvolvimento, you can compare the effects of market volatilities on CME and Plano Plano 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 CME with a short position of Plano Plano. Check out your portfolio center. Please also check ongoing floating volatility patterns of CME and Plano Plano.
Diversification Opportunities for CME and Plano Plano
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CME and Plano is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding CME Group and Plano Plano Desenvolvimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plano Plano Desenvol and CME 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 CME Group are associated (or correlated) with Plano Plano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plano Plano Desenvol has no effect on the direction of CME i.e., CME and Plano Plano go up and down completely randomly.
Pair Corralation between CME and Plano Plano
Assuming the 90 days trading horizon CME is expected to generate 3.09 times less return on investment than Plano Plano. But when comparing it to its historical volatility, CME Group is 2.58 times less risky than Plano Plano. It trades about 0.08 of its potential returns per unit of risk. Plano Plano Desenvolvimento is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 381.00 in Plano Plano Desenvolvimento on August 31, 2024 and sell it today you would earn a total of 843.00 from holding Plano Plano Desenvolvimento or generate 221.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.96% |
| Values | Daily Returns |
CME Group vs. Plano Plano Desenvolvimento
Performance |
| Timeline |
| CME Group |
| Plano Plano Desenvol |
CME and Plano Plano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CME and Plano Plano
The main advantage of trading using opposite CME and Plano Plano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CME position performs unexpectedly, Plano Plano 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 Plano Plano will offset losses from the drop in Plano Plano's long position.The idea behind CME Group and Plano Plano Desenvolvimento pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Plano Plano vs. Bemobi Mobile Tech | Plano Plano vs. Lupatech SA | Plano Plano vs. Southwest Airlines Co | Plano Plano vs. salesforce inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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