Correlation Between Carrefour and Compagnie Generale
Can any of the company-specific risk be diversified away by investing in both Carrefour and Compagnie Generale 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 Carrefour and Compagnie Generale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carrefour SA PK and Compagnie Generale des, you can compare the effects of market volatilities on Carrefour and Compagnie Generale 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 Carrefour with a short position of Compagnie Generale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carrefour and Compagnie Generale.
Diversification Opportunities for Carrefour and Compagnie Generale
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Carrefour and Compagnie is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Carrefour SA PK and Compagnie Generale des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Generale des and Carrefour 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 Carrefour SA PK are associated (or correlated) with Compagnie Generale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Generale des has no effect on the direction of Carrefour i.e., Carrefour and Compagnie Generale go up and down completely randomly.
Pair Corralation between Carrefour and Compagnie Generale
Assuming the 90 days horizon Carrefour SA PK is expected to under-perform the Compagnie Generale. In addition to that, Carrefour is 1.34 times more volatile than Compagnie Generale des. It trades about -0.03 of its total potential returns per unit of risk. Compagnie Generale des is currently generating about 0.01 per unit of volatility. If you would invest 1,693 in Compagnie Generale des on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Compagnie Generale des or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Carrefour SA PK vs. Compagnie Generale des
Performance |
| Timeline |
| Carrefour SA PK |
| Compagnie Generale des |
Carrefour and Compagnie Generale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carrefour and Compagnie Generale
The main advantage of trading using opposite Carrefour and Compagnie Generale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carrefour position performs unexpectedly, Compagnie Generale 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 Generale will offset losses from the drop in Compagnie Generale's long position.| Carrefour vs. Natural Grocers by | Carrefour vs. Grocery Outlet Holding | Carrefour vs. Village Super Market | Carrefour vs. Ingles Markets Incorporated |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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