Correlation Between Courtois and Crosswood
Can any of the company-specific risk be diversified away by investing in both Courtois and Crosswood 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 Courtois and Crosswood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Courtois SA and Crosswood, you can compare the effects of market volatilities on Courtois and Crosswood 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 Courtois with a short position of Crosswood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Courtois and Crosswood.
Diversification Opportunities for Courtois and Crosswood
Average diversification
The 3 months correlation between Courtois and Crosswood is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Courtois SA and Crosswood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crosswood and Courtois 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 Courtois SA are associated (or correlated) with Crosswood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crosswood has no effect on the direction of Courtois i.e., Courtois and Crosswood go up and down completely randomly.
Pair Corralation between Courtois and Crosswood
Assuming the 90 days trading horizon Courtois SA is expected to under-perform the Crosswood. But the stock apears to be less risky and, when comparing its historical volatility, Courtois SA is 1.62 times less risky than Crosswood. The stock trades about -0.12 of its potential returns per unit of risk. The Crosswood is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 885.00 in Crosswood on September 1, 2024 and sell it today you would lose (5.00) from holding Crosswood or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Courtois SA vs. Crosswood
Performance |
| Timeline |
| Courtois SA |
| Crosswood |
Courtois and Crosswood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Courtois and Crosswood
The main advantage of trading using opposite Courtois and Crosswood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Courtois position performs unexpectedly, Crosswood 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 Crosswood will offset losses from the drop in Crosswood's long position.| Courtois vs. Rallye SA | Courtois vs. Altamir SCA | Courtois vs. Fonciere Lyonnaise | Courtois vs. Fonciere Inea |
| Crosswood vs. Marie Brizard Wine | Crosswood vs. Pullup Entertainment Socit | Crosswood vs. Hotel Majestic Cannes | Crosswood vs. Jacquet Metal Service |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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