Correlation Between Empire State and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Empire State 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 Empire State and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Empire State 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 Empire State with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Compagnie Plastic.
Diversification Opportunities for Empire State and Compagnie Plastic
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Empire and Compagnie is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty 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 Empire State 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 Empire State Realty 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 Empire State i.e., Empire State and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Empire State and Compagnie Plastic
Given the investment horizon of 90 days Empire State Realty is expected to under-perform the Compagnie Plastic. But the stock apears to be less risky and, when comparing its historical volatility, Empire State Realty is 1.85 times less risky than Compagnie Plastic. The stock trades about -0.28 of its potential returns per unit of risk. The Compagnie Plastic Omnium is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Compagnie Plastic Omnium on November 28, 2024 and sell it today you would earn a total of 2.00 from holding Compagnie Plastic Omnium or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Empire State Realty vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Empire State Realty |
| Compagnie Plastic Omnium |
Empire State and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Compagnie Plastic
The main advantage of trading using opposite Empire State and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State 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.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Compagnie Plastic vs. Check Point Software | Compagnie Plastic vs. AMG Advanced Metallurgical | Compagnie Plastic vs. METALL ZUG AG | Compagnie Plastic vs. Automatic Data Processing |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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