Correlation Between De Grey and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both De Grey 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 De Grey and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Grey Mining and Compagnie Plastic Omnium, you can compare the effects of market volatilities on De Grey 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 De Grey with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Compagnie Plastic.
Diversification Opportunities for De Grey and Compagnie Plastic
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DGD and Compagnie is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining 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 De Grey 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 De Grey Mining 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 De Grey i.e., De Grey and Compagnie Plastic go up and down completely randomly.
Pair Corralation between De Grey and Compagnie Plastic
Assuming the 90 days trading horizon De Grey Mining is expected to generate 1.35 times more return on investment than Compagnie Plastic. However, De Grey is 1.35 times more volatile than Compagnie Plastic Omnium. It trades about 0.03 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.01 per unit of risk. If you would invest 98.00 in De Grey Mining on October 18, 2024 and sell it today you would earn a total of 21.00 from holding De Grey Mining or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
De Grey Mining vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| De Grey Mining |
| Compagnie Plastic Omnium |
De Grey and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Compagnie Plastic
The main advantage of trading using opposite De Grey and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey 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.| De Grey vs. AGF Management Limited | De Grey vs. Q2M Managementberatung AG | De Grey vs. TOREX SEMICONDUCTOR LTD | De Grey vs. Cleanaway Waste Management |
| Compagnie Plastic vs. De Grey Mining | Compagnie Plastic vs. Harmony Gold Mining | Compagnie Plastic vs. Laureate Education | Compagnie Plastic vs. Yanzhou Coal Mining |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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