Correlation Between Caisse Regionale and Manitou BF
Can any of the company-specific risk be diversified away by investing in both Caisse Regionale and Manitou BF 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 Caisse Regionale and Manitou BF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caisse Regionale de and Manitou BF SA, you can compare the effects of market volatilities on Caisse Regionale and Manitou BF 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 Caisse Regionale with a short position of Manitou BF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caisse Regionale and Manitou BF.
Diversification Opportunities for Caisse Regionale and Manitou BF
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caisse and Manitou is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Caisse Regionale de and Manitou BF SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitou BF SA and Caisse Regionale 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 Caisse Regionale de are associated (or correlated) with Manitou BF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitou BF SA has no effect on the direction of Caisse Regionale i.e., Caisse Regionale and Manitou BF go up and down completely randomly.
Pair Corralation between Caisse Regionale and Manitou BF
Assuming the 90 days trading horizon Caisse Regionale de is expected to generate 0.28 times more return on investment than Manitou BF. However, Caisse Regionale de is 3.55 times less risky than Manitou BF. It trades about 0.43 of its potential returns per unit of risk. Manitou BF SA is currently generating about -0.07 per unit of risk. If you would invest 6,480 in Caisse Regionale de on December 9, 2024 and sell it today you would earn a total of 795.00 from holding Caisse Regionale de or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caisse Regionale de vs. Manitou BF SA
Performance |
| Timeline |
| Caisse Regionale |
| Manitou BF SA |
Caisse Regionale and Manitou BF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caisse Regionale and Manitou BF
The main advantage of trading using opposite Caisse Regionale and Manitou BF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caisse Regionale position performs unexpectedly, Manitou BF 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 Manitou BF will offset losses from the drop in Manitou BF's long position.The idea behind Caisse Regionale de and Manitou BF SA 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.| Manitou BF vs. Haulotte Group SA | ||
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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