Correlation Between Frontier Transport and Compagnie Financire
Can any of the company-specific risk be diversified away by investing in both Frontier Transport and Compagnie Financire 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 Frontier Transport and Compagnie Financire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontier Transport Holdings and Compagnie Financire Richemont, you can compare the effects of market volatilities on Frontier Transport and Compagnie Financire 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 Frontier Transport with a short position of Compagnie Financire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Transport and Compagnie Financire.
Diversification Opportunities for Frontier Transport and Compagnie Financire
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Frontier and Compagnie is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Transport Holdings and Compagnie Financire Richemont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Financire and Frontier Transport 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 Frontier Transport Holdings are associated (or correlated) with Compagnie Financire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Financire has no effect on the direction of Frontier Transport i.e., Frontier Transport and Compagnie Financire go up and down completely randomly.
Pair Corralation between Frontier Transport and Compagnie Financire
Assuming the 90 days trading horizon Frontier Transport Holdings is expected to under-perform the Compagnie Financire. In addition to that, Frontier Transport is 3.25 times more volatile than Compagnie Financire Richemont. It trades about -0.04 of its total potential returns per unit of risk. Compagnie Financire Richemont is currently generating about -0.05 per unit of volatility. If you would invest 25,446,600 in Compagnie Financire Richemont on September 1, 2024 and sell it today you would lose (546,900) from holding Compagnie Financire Richemont or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Frontier Transport Holdings vs. Compagnie Financire Richemont
Performance |
| Timeline |
| Frontier Transport |
| Compagnie Financire |
Frontier Transport and Compagnie Financire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontier Transport and Compagnie Financire
The main advantage of trading using opposite Frontier Transport and Compagnie Financire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Transport position performs unexpectedly, Compagnie Financire 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 Compagnie Financire will offset losses from the drop in Compagnie Financire's long position.| Frontier Transport vs. Sasol Ltd Bee | Frontier Transport vs. Growthpoint Properties | Frontier Transport vs. AfricaRhodium ETF | Frontier Transport vs. CoreShares Preference Share |
| Compagnie Financire vs. Brimstone Investment | Compagnie Financire vs. Reinet Investments SCA | Compagnie Financire vs. Frontier Transport Holdings | Compagnie Financire vs. Deneb Investments |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |