Correlation Between Compagnie Plastic and BRAEMAR HOTELS
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and BRAEMAR HOTELS 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 BRAEMAR HOTELS 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 BRAEMAR HOTELS RES, you can compare the effects of market volatilities on Compagnie Plastic and BRAEMAR HOTELS 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 BRAEMAR HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and BRAEMAR HOTELS.
Diversification Opportunities for Compagnie Plastic and BRAEMAR HOTELS
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compagnie and BRAEMAR is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and BRAEMAR HOTELS RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAEMAR HOTELS RES 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 BRAEMAR HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAEMAR HOTELS RES has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and BRAEMAR HOTELS go up and down completely randomly.
Pair Corralation between Compagnie Plastic and BRAEMAR HOTELS
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to generate 0.78 times more return on investment than BRAEMAR HOTELS. However, Compagnie Plastic Omnium is 1.28 times less risky than BRAEMAR HOTELS. It trades about 0.14 of its potential returns per unit of risk. BRAEMAR HOTELS RES is currently generating about -0.3 per unit of risk. If you would invest 1,001 in Compagnie Plastic Omnium on November 5, 2024 and sell it today you would earn a total of 67.00 from holding Compagnie Plastic Omnium or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. BRAEMAR HOTELS RES
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| BRAEMAR HOTELS RES |
Compagnie Plastic and BRAEMAR HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and BRAEMAR HOTELS
The main advantage of trading using opposite Compagnie Plastic and BRAEMAR HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, BRAEMAR HOTELS 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 BRAEMAR HOTELS will offset losses from the drop in BRAEMAR HOTELS's long position.| Compagnie Plastic vs. Teradata Corp | Compagnie Plastic vs. National Beverage Corp | Compagnie Plastic vs. BOSTON BEER A | Compagnie Plastic vs. TERADATA |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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