Correlation Between CIE Automotive and Solaria Energa
Can any of the company-specific risk be diversified away by investing in both CIE Automotive and Solaria Energa 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 Solaria Energa 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 Solaria Energa y, you can compare the effects of market volatilities on CIE Automotive and Solaria Energa 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 Solaria Energa. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIE Automotive and Solaria Energa.
Diversification Opportunities for CIE Automotive and Solaria Energa
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CIE and Solaria is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding CIE Automotive SA and Solaria Energa y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solaria Energa y 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 Solaria Energa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solaria Energa y has no effect on the direction of CIE Automotive i.e., CIE Automotive and Solaria Energa go up and down completely randomly.
Pair Corralation between CIE Automotive and Solaria Energa
Assuming the 90 days trading horizon CIE Automotive SA is expected to generate 0.49 times more return on investment than Solaria Energa. However, CIE Automotive SA is 2.02 times less risky than Solaria Energa. It trades about -0.01 of its potential returns per unit of risk. Solaria Energa y is currently generating about -0.02 per unit of risk. If you would invest 2,704 in CIE Automotive SA on August 31, 2024 and sell it today you would lose (194.00) from holding CIE Automotive SA or give up 7.17% 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. Solaria Energa y
Performance |
| Timeline |
| CIE Automotive SA |
| Solaria Energa y |
CIE Automotive and Solaria Energa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIE Automotive and Solaria Energa
The main advantage of trading using opposite CIE Automotive and Solaria Energa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIE Automotive position performs unexpectedly, Solaria Energa 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 Solaria Energa will offset losses from the drop in Solaria Energa's long position.| CIE Automotive vs. Viscofan | CIE Automotive vs. Gestamp Automocion SA | CIE Automotive vs. ENCE Energa y | CIE Automotive vs. Acerinox |
| Solaria Energa vs. Audax Renovables SA | Solaria Energa vs. Pharma Mar SA | Solaria Energa vs. Cellnex Telecom SA | Solaria Energa vs. Grifols SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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