Correlation Between Compagnie Plastic and Carsales
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Carsales 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 Carsales 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 Carsales, you can compare the effects of market volatilities on Compagnie Plastic and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Carsales.
Diversification Opportunities for Compagnie Plastic and Carsales
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compagnie and Carsales is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Carsales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carsales 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carsales has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Carsales go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Carsales
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to under-perform the Carsales. In addition to that, Compagnie Plastic is 1.49 times more volatile than Carsales. It trades about -0.02 of its total potential returns per unit of risk. Carsales is currently generating about 0.09 per unit of volatility. If you would invest 1,282 in Carsales on September 3, 2024 and sell it today you would earn a total of 1,258 from holding Carsales or generate 98.13% 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. Carsales
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Carsales |
Compagnie Plastic and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Carsales
The main advantage of trading using opposite Compagnie Plastic and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| Compagnie Plastic vs. Dno ASA | Compagnie Plastic vs. PT Astra International | Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings |
| Carsales vs. Thai Beverage Public | Carsales vs. Premier Foods PLC | Carsales vs. Food Life Companies | Carsales vs. CN MODERN DAIRY |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |