Correlation Between Compagnie Plastic and DICKS Sporting
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and DICKS Sporting 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 DICKS Sporting 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 DICKS Sporting Goods, you can compare the effects of market volatilities on Compagnie Plastic and DICKS Sporting 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 DICKS Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and DICKS Sporting.
Diversification Opportunities for Compagnie Plastic and DICKS Sporting
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compagnie and DICKS is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and DICKS Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKS Sporting Goods 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 DICKS Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKS Sporting Goods has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and DICKS Sporting go up and down completely randomly.
Pair Corralation between Compagnie Plastic and DICKS Sporting
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to under-perform the DICKS Sporting. But the stock apears to be less risky and, when comparing its historical volatility, Compagnie Plastic Omnium is 1.32 times less risky than DICKS Sporting. The stock trades about -0.19 of its potential returns per unit of risk. The DICKS Sporting Goods is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 18,442 in DICKS Sporting Goods on August 31, 2024 and sell it today you would earn a total of 2,408 from holding DICKS Sporting Goods or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. DICKS Sporting Goods
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| DICKS Sporting Goods |
Compagnie Plastic and DICKS Sporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and DICKS Sporting
The main advantage of trading using opposite Compagnie Plastic and DICKS Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, DICKS Sporting 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 DICKS Sporting will offset losses from the drop in DICKS Sporting'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 |
| DICKS Sporting vs. MercadoLibre | DICKS Sporting vs. AutoZone | DICKS Sporting vs. Superior Plus Corp | DICKS Sporting vs. NMI Holdings |
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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