Correlation Between Compagnie and Daikin Industries
Can any of the company-specific risk be diversified away by investing in both Compagnie and Daikin Industries 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 and Daikin Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie de Saint Gobain and Daikin Industries Ltd, you can compare the effects of market volatilities on Compagnie and Daikin Industries 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 with a short position of Daikin Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Daikin Industries.
Diversification Opportunities for Compagnie and Daikin Industries
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compagnie and Daikin is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and Daikin Industries Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daikin Industries and Compagnie 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 de Saint Gobain are associated (or correlated) with Daikin Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daikin Industries has no effect on the direction of Compagnie i.e., Compagnie and Daikin Industries go up and down completely randomly.
Pair Corralation between Compagnie and Daikin Industries
Assuming the 90 days horizon Compagnie de Saint Gobain is expected to generate 0.49 times more return on investment than Daikin Industries. However, Compagnie de Saint Gobain is 2.05 times less risky than Daikin Industries. It trades about 0.23 of its potential returns per unit of risk. Daikin Industries Ltd is currently generating about 0.04 per unit of risk. If you would invest 9,019 in Compagnie de Saint Gobain on August 27, 2024 and sell it today you would earn a total of 441.00 from holding Compagnie de Saint Gobain or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie de Saint Gobain vs. Daikin Industries Ltd
Performance |
| Timeline |
| Compagnie de Saint |
| Daikin Industries |
Compagnie and Daikin Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Daikin Industries
The main advantage of trading using opposite Compagnie and Daikin Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Daikin Industries 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 Daikin Industries will offset losses from the drop in Daikin Industries' long position.| Compagnie vs. Antelope Enterprise Holdings | Compagnie vs. Azek Company | Compagnie vs. AAON Inc | Compagnie vs. GMS Inc |
| Daikin Industries vs. NIBE Industrier AB | Daikin Industries vs. Trane Technologies plc | Daikin Industries vs. AAON Inc | Daikin Industries vs. Johnson Controls International |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |