Correlation Between Compagnie Plastic and Carmat SA
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Carmat SA 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 Carmat SA 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 Carmat SA, you can compare the effects of market volatilities on Compagnie Plastic and Carmat SA 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 Carmat SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Carmat SA.
Diversification Opportunities for Compagnie Plastic and Carmat SA
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compagnie and Carmat is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Carmat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carmat SA 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 Carmat SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carmat SA has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Carmat SA go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Carmat SA
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to generate 0.47 times more return on investment than Carmat SA. However, Compagnie Plastic Omnium is 2.13 times less risky than Carmat SA. It trades about -0.1 of its potential returns per unit of risk. Carmat SA is currently generating about -0.21 per unit of risk. If you would invest 883.00 in Compagnie Plastic Omnium on September 1, 2024 and sell it today you would lose (47.00) from holding Compagnie Plastic Omnium or give up 5.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Carmat SA
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Carmat SA |
Compagnie Plastic and Carmat SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Carmat SA
The main advantage of trading using opposite Compagnie Plastic and Carmat SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Carmat SA 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 Carmat SA will offset losses from the drop in Carmat SA's long position.| Compagnie Plastic vs. PT Astra International | Compagnie Plastic vs. Magna International | Compagnie Plastic vs. Fuyao Glass Industry | Compagnie Plastic vs. Superior Plus Corp |
| Carmat SA vs. National Retail Properties | Carmat SA vs. Sunstone Hotel Investors | Carmat SA vs. CARSALESCOM | Carmat SA vs. FAST RETAIL ADR |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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