Correlation Between Compagnie Plastic and Great-West Lifeco
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Great-West Lifeco 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 Great-West Lifeco 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 Great West Lifeco, you can compare the effects of market volatilities on Compagnie Plastic and Great-West Lifeco 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 Great-West Lifeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Great-West Lifeco.
Diversification Opportunities for Compagnie Plastic and Great-West Lifeco
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compagnie and Great-West is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great-West Lifeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Great-West Lifeco go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Great-West Lifeco
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to generate 2.34 times more return on investment than Great-West Lifeco. However, Compagnie Plastic is 2.34 times more volatile than Great West Lifeco. It trades about 0.08 of its potential returns per unit of risk. Great West Lifeco is currently generating about 0.14 per unit of risk. If you would invest 857.00 in Compagnie Plastic Omnium on November 3, 2024 and sell it today you would earn a total of 221.00 from holding Compagnie Plastic Omnium or generate 25.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Great West Lifeco
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Great West Lifeco |
Compagnie Plastic and Great-West Lifeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Great-West Lifeco
The main advantage of trading using opposite Compagnie Plastic and Great-West Lifeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Great-West Lifeco 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 Great-West Lifeco will offset losses from the drop in Great-West Lifeco's long position.| Compagnie Plastic vs. Stag Industrial | Compagnie Plastic vs. Calibre Mining Corp | Compagnie Plastic vs. Zijin Mining Group | Compagnie Plastic vs. Siemens Healthineers AG |
| Great-West Lifeco vs. Kingdee International Software | Great-West Lifeco vs. SILVER BULLET DATA | Great-West Lifeco vs. Alfa Financial Software | Great-West Lifeco vs. China Datang |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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