Correlation Between Derichebourg and CMG Cleantech
Can any of the company-specific risk be diversified away by investing in both Derichebourg and CMG Cleantech 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 Derichebourg and CMG Cleantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Derichebourg and CMG Cleantech SA, you can compare the effects of market volatilities on Derichebourg and CMG Cleantech 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 Derichebourg with a short position of CMG Cleantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Derichebourg and CMG Cleantech.
Diversification Opportunities for Derichebourg and CMG Cleantech
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Derichebourg and CMG is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Derichebourg and CMG Cleantech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMG Cleantech SA and Derichebourg 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 Derichebourg are associated (or correlated) with CMG Cleantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMG Cleantech SA has no effect on the direction of Derichebourg i.e., Derichebourg and CMG Cleantech go up and down completely randomly.
Pair Corralation between Derichebourg and CMG Cleantech
Assuming the 90 days trading horizon Derichebourg is expected to generate 1.38 times less return on investment than CMG Cleantech. But when comparing it to its historical volatility, Derichebourg is 1.22 times less risky than CMG Cleantech. It trades about 0.07 of its potential returns per unit of risk. CMG Cleantech SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 84.00 in CMG Cleantech SA on October 18, 2024 and sell it today you would earn a total of 36.00 from holding CMG Cleantech SA or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Derichebourg vs. CMG Cleantech SA
Performance |
| Timeline |
| Derichebourg |
| CMG Cleantech SA |
Derichebourg and CMG Cleantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Derichebourg and CMG Cleantech
The main advantage of trading using opposite Derichebourg and CMG Cleantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Derichebourg position performs unexpectedly, CMG Cleantech 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 CMG Cleantech will offset losses from the drop in CMG Cleantech's long position.| Derichebourg vs. Eramet SA | Derichebourg vs. Trigano SA | Derichebourg vs. Soitec SA | Derichebourg vs. Rubis SCA |
| CMG Cleantech vs. EPC Groupe | CMG Cleantech vs. Groupe Sfpi | CMG Cleantech vs. Baikowski SASU | CMG Cleantech vs. NSE SA |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| 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 | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |