Correlation Between Compagnie and Geberit AG
Can any of the company-specific risk be diversified away by investing in both Compagnie and Geberit AG 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 Geberit AG 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 Geberit AG ADR, you can compare the effects of market volatilities on Compagnie and Geberit AG 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 Geberit AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Geberit AG.
Diversification Opportunities for Compagnie and Geberit AG
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compagnie and Geberit is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and Geberit AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geberit AG ADR 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 Geberit AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geberit AG ADR has no effect on the direction of Compagnie i.e., Compagnie and Geberit AG go up and down completely randomly.
Pair Corralation between Compagnie and Geberit AG
Assuming the 90 days horizon Compagnie de Saint Gobain is expected to generate 0.8 times more return on investment than Geberit AG. However, Compagnie de Saint Gobain is 1.26 times less risky than Geberit AG. It trades about 0.23 of its potential returns per unit of risk. Geberit AG ADR is currently generating about -0.15 per unit of risk. If you would invest 9,019 in Compagnie de Saint Gobain on September 1, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie de Saint Gobain vs. Geberit AG ADR
Performance |
| Timeline |
| Compagnie de Saint |
| Geberit AG ADR |
Compagnie and Geberit AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Geberit AG
The main advantage of trading using opposite Compagnie and Geberit AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Geberit AG 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 Geberit AG will offset losses from the drop in Geberit AG's long position.| Compagnie vs. Antelope Enterprise Holdings | Compagnie vs. Azek Company | Compagnie vs. AAON Inc | Compagnie vs. GMS Inc |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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