Correlation Between Compagnie Plastic and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and MEDICAL FACILITIES 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 Compagnie Plastic and MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on Compagnie Plastic and MEDICAL FACILITIES 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 Compagnie Plastic with a short position of MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and MEDICAL FACILITIES.
Diversification Opportunities for Compagnie Plastic and MEDICAL FACILITIES
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Compagnie and MEDICAL is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW and Compagnie Plastic 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 Compagnie Plastic Omnium are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between Compagnie Plastic and MEDICAL FACILITIES
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to generate 1.25 times more return on investment than MEDICAL FACILITIES. However, Compagnie Plastic is 1.25 times more volatile than MEDICAL FACILITIES NEW. It trades about 0.16 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.17 per unit of risk. If you would invest 1,001 in Compagnie Plastic Omnium on October 25, 2024 and sell it today you would earn a total of 65.00 from holding Compagnie Plastic Omnium or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| MEDICAL FACILITIES NEW |
Compagnie Plastic and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and MEDICAL FACILITIES
The main advantage of trading using opposite Compagnie Plastic and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| Compagnie Plastic vs. Dno ASA | Compagnie Plastic vs. DENSO P ADR | Compagnie Plastic vs. Aptiv PLC | Compagnie Plastic vs. Bridgestone |
| MEDICAL FACILITIES vs. Mitsubishi Materials | MEDICAL FACILITIES vs. Magnachip Semiconductor | MEDICAL FACILITIES vs. Heidelberg Materials AG | MEDICAL FACILITIES vs. Compagnie Plastic Omnium |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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