Correlation Between Compagnie Plastic and Qingling Motors
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Qingling Motors 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 Qingling Motors 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 Qingling Motors Co, you can compare the effects of market volatilities on Compagnie Plastic and Qingling Motors 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 Qingling Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Qingling Motors.
Diversification Opportunities for Compagnie Plastic and Qingling Motors
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Compagnie and Qingling is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Qingling Motors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingling Motors 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 Qingling Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingling Motors has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Qingling Motors go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Qingling Motors
Assuming the 90 days horizon Compagnie Plastic is expected to generate 1.09 times less return on investment than Qingling Motors. In addition to that, Compagnie Plastic is 1.12 times more volatile than Qingling Motors Co. It trades about 0.2 of its total potential returns per unit of risk. Qingling Motors Co is currently generating about 0.24 per unit of volatility. If you would invest 5.60 in Qingling Motors Co on September 15, 2024 and sell it today you would earn a total of 0.76 from holding Qingling Motors Co or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Qingling Motors Co
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Qingling Motors |
Compagnie Plastic and Qingling Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Qingling Motors
The main advantage of trading using opposite Compagnie Plastic and Qingling Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Qingling Motors 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 Qingling Motors will offset losses from the drop in Qingling Motors' long position.| Compagnie Plastic vs. Eastman Chemical | Compagnie Plastic vs. Perdoceo Education | Compagnie Plastic vs. CHINA EDUCATION GROUP | Compagnie Plastic vs. CAREER EDUCATION |
| Qingling Motors vs. Heidelberg Materials AG | Qingling Motors vs. Host Hotels Resorts | Qingling Motors vs. Compagnie Plastic Omnium | Qingling Motors vs. INTERCONT HOTELS |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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