Correlation Between Compagnie Plastic and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and BRIT AMER 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 BRIT AMER 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 BRIT AMER TOBACCO, you can compare the effects of market volatilities on Compagnie Plastic and BRIT AMER 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 BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and BRIT AMER.
Diversification Opportunities for Compagnie Plastic and BRIT AMER
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Compagnie and BRIT is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO 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 BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and BRIT AMER go up and down completely randomly.
Pair Corralation between Compagnie Plastic and BRIT AMER
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to under-perform the BRIT AMER. In addition to that, Compagnie Plastic is 2.11 times more volatile than BRIT AMER TOBACCO. It trades about -0.02 of its total potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.05 per unit of volatility. If you would invest 3,077 in BRIT AMER TOBACCO on November 9, 2024 and sell it today you would earn a total of 910.00 from holding BRIT AMER TOBACCO or generate 29.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. BRIT AMER TOBACCO
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| BRIT AMER TOBACCO |
Compagnie Plastic and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and BRIT AMER
The main advantage of trading using opposite Compagnie Plastic and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER's long position.| Compagnie Plastic vs. SAN MIGUEL BREWERY | Compagnie Plastic vs. SALESFORCE INC CDR | Compagnie Plastic vs. BOSTON BEER A | Compagnie Plastic vs. FLOW TRADERS LTD |
| BRIT AMER vs. GEELY AUTOMOBILE | BRIT AMER vs. MCEWEN MINING INC | BRIT AMER vs. MAGNUM MINING EXP | BRIT AMER vs. Evolution Mining Limited |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |