Correlation Between Compagnie Plastic and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Automatic Data 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 Automatic Data 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 Automatic Data Processing, you can compare the effects of market volatilities on Compagnie Plastic and Automatic Data 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 Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Automatic Data.
Diversification Opportunities for Compagnie Plastic and Automatic Data
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Compagnie and Automatic is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing 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 Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Automatic Data go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Automatic Data
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to generate 2.01 times more return on investment than Automatic Data. However, Compagnie Plastic is 2.01 times more volatile than Automatic Data Processing. It trades about 0.16 of its potential returns per unit of risk. Automatic Data Processing is currently generating about 0.01 per unit of risk. If you would invest 1,000.00 in Compagnie Plastic Omnium on October 29, 2024 and sell it today you would earn a total of 68.00 from holding Compagnie Plastic Omnium or generate 6.8% 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. Automatic Data Processing
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Automatic Data Processing |
Compagnie Plastic and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Automatic Data
The main advantage of trading using opposite Compagnie Plastic and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| Compagnie Plastic vs. BROADWIND ENRGY | Compagnie Plastic vs. GALENA MINING LTD | Compagnie Plastic vs. Television Broadcasts Limited | Compagnie Plastic vs. TRAINLINE PLC LS |
| Automatic Data vs. United Airlines Holdings | Automatic Data vs. COLUMBIA SPORTSWEAR | Automatic Data vs. PLAYTECH | Automatic Data vs. Aegean Airlines SA |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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