Correlation Between CIE Automotive and Global Dominion
Can any of the company-specific risk be diversified away by investing in both CIE Automotive and Global Dominion 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 CIE Automotive and Global Dominion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIE Automotive SA and Global Dominion Access, you can compare the effects of market volatilities on CIE Automotive and Global Dominion 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 CIE Automotive with a short position of Global Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIE Automotive and Global Dominion.
Diversification Opportunities for CIE Automotive and Global Dominion
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CIE and Global is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding CIE Automotive SA and Global Dominion Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Dominion Access and CIE Automotive 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 CIE Automotive SA are associated (or correlated) with Global Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Dominion Access has no effect on the direction of CIE Automotive i.e., CIE Automotive and Global Dominion go up and down completely randomly.
Pair Corralation between CIE Automotive and Global Dominion
Assuming the 90 days trading horizon CIE Automotive SA is expected to under-perform the Global Dominion. But the stock apears to be less risky and, when comparing its historical volatility, CIE Automotive SA is 2.72 times less risky than Global Dominion. The stock trades about -0.46 of its potential returns per unit of risk. The Global Dominion Access is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 303.00 in Global Dominion Access on November 29, 2024 and sell it today you would lose (16.00) from holding Global Dominion Access or give up 5.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIE Automotive SA vs. Global Dominion Access
Performance |
| Timeline |
| CIE Automotive SA |
| Global Dominion Access |
CIE Automotive and Global Dominion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIE Automotive and Global Dominion
The main advantage of trading using opposite CIE Automotive and Global Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIE Automotive position performs unexpectedly, Global Dominion 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 Global Dominion will offset losses from the drop in Global Dominion's long position.| CIE Automotive vs. Viscofan | CIE Automotive vs. Gestamp Automocion SA | CIE Automotive vs. ENCE Energa y | CIE Automotive vs. Acerinox |
| Global Dominion vs. CIE Automotive SA | Global Dominion vs. Gestamp Automocion SA | Global Dominion vs. Vidrala SA | Global Dominion vs. Miquel y Costas |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |