Correlation Between Coface SA and Reworld Media
Can any of the company-specific risk be diversified away by investing in both Coface SA and Reworld Media 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 Coface SA and Reworld Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coface SA and Reworld Media, you can compare the effects of market volatilities on Coface SA and Reworld Media 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 Coface SA with a short position of Reworld Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coface SA and Reworld Media.
Diversification Opportunities for Coface SA and Reworld Media
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Coface and Reworld is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Coface SA and Reworld Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reworld Media and Coface SA 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 Coface SA are associated (or correlated) with Reworld Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reworld Media has no effect on the direction of Coface SA i.e., Coface SA and Reworld Media go up and down completely randomly.
Pair Corralation between Coface SA and Reworld Media
Assuming the 90 days trading horizon Coface SA is expected to generate 0.31 times more return on investment than Reworld Media. However, Coface SA is 3.23 times less risky than Reworld Media. It trades about 0.0 of its potential returns per unit of risk. Reworld Media is currently generating about -0.14 per unit of risk. If you would invest 1,465 in Coface SA on September 2, 2024 and sell it today you would lose (1.00) from holding Coface SA or give up 0.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coface SA vs. Reworld Media
Performance |
| Timeline |
| Coface SA |
| Reworld Media |
Coface SA and Reworld Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coface SA and Reworld Media
The main advantage of trading using opposite Coface SA and Reworld Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coface SA position performs unexpectedly, Reworld Media 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 Reworld Media will offset losses from the drop in Reworld Media's long position.| Coface SA vs. Amundi SA | Coface SA vs. Teleperformance SE | Coface SA vs. Eurofins Scientific SE | Coface SA vs. Sartorius Stedim Biotech |
| Reworld Media vs. Rubis SCA | Reworld Media vs. Coface SA | Reworld Media vs. SCOR SE | Reworld Media vs. Nexity |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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