Correlation Between Compagnie Plastic and MSAD INSURANCE
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and MSAD INSURANCE 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 MSAD INSURANCE 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 MSAD INSURANCE, you can compare the effects of market volatilities on Compagnie Plastic and MSAD INSURANCE 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 MSAD INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and MSAD INSURANCE.
Diversification Opportunities for Compagnie Plastic and MSAD INSURANCE
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Compagnie and MSAD is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and MSAD INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSAD INSURANCE 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 MSAD INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSAD INSURANCE has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and MSAD INSURANCE go up and down completely randomly.
Pair Corralation between Compagnie Plastic and MSAD INSURANCE
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to under-perform the MSAD INSURANCE. In addition to that, Compagnie Plastic is 1.09 times more volatile than MSAD INSURANCE. It trades about -0.06 of its total potential returns per unit of risk. MSAD INSURANCE is currently generating about 0.03 per unit of volatility. If you would invest 1,960 in MSAD INSURANCE on September 2, 2024 and sell it today you would earn a total of 140.00 from holding MSAD INSURANCE or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. MSAD INSURANCE
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| MSAD INSURANCE |
Compagnie Plastic and MSAD INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and MSAD INSURANCE
The main advantage of trading using opposite Compagnie Plastic and MSAD INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, MSAD INSURANCE 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 MSAD INSURANCE will offset losses from the drop in MSAD INSURANCE's long position.| Compagnie Plastic vs. PT Astra International | Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings | Compagnie Plastic vs. Origin Agritech |
| MSAD INSURANCE vs. SIVERS SEMICONDUCTORS AB | MSAD INSURANCE vs. Darden Restaurants | MSAD INSURANCE vs. Reliance Steel Aluminum | MSAD INSURANCE vs. Q2M Managementberatung AG |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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