Correlation Between Continental Aktiengesellscha and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Continental Aktiengesellscha and Compagnie Plastic 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 Continental Aktiengesellscha and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Aktiengesellschaft and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Continental Aktiengesellscha and Compagnie Plastic 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 Continental Aktiengesellscha with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Aktiengesellscha and Compagnie Plastic.
Diversification Opportunities for Continental Aktiengesellscha and Compagnie Plastic
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Continental and Compagnie is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Continental Aktiengesellschaft and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium and Continental Aktiengesellscha 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 Continental Aktiengesellschaft are associated (or correlated) with Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Continental Aktiengesellscha i.e., Continental Aktiengesellscha and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Continental Aktiengesellscha and Compagnie Plastic
Assuming the 90 days horizon Continental Aktiengesellschaft is expected to generate 0.96 times more return on investment than Compagnie Plastic. However, Continental Aktiengesellschaft is 1.05 times less risky than Compagnie Plastic. It trades about -0.02 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.03 per unit of risk. If you would invest 6,982 in Continental Aktiengesellschaft on September 1, 2024 and sell it today you would lose (798.00) from holding Continental Aktiengesellschaft or give up 11.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.48% |
| Values | Daily Returns |
Continental Aktiengesellschaft vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Continental Aktiengesellscha |
| Compagnie Plastic Omnium |
Continental Aktiengesellscha and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Aktiengesellscha and Compagnie Plastic
The main advantage of trading using opposite Continental Aktiengesellscha and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Aktiengesellscha position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.The idea behind Continental Aktiengesellschaft and Compagnie Plastic Omnium pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Compagnie Plastic vs. PT Astra International | Compagnie Plastic vs. Magna International | Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| 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 | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |