Correlation Between Gestamp Automocion and CIE Automotive
Can any of the company-specific risk be diversified away by investing in both Gestamp Automocion and CIE Automotive 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 Gestamp Automocion and CIE Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gestamp Automocion SA and CIE Automotive SA, you can compare the effects of market volatilities on Gestamp Automocion and CIE Automotive 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 Gestamp Automocion with a short position of CIE Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gestamp Automocion and CIE Automotive.
Diversification Opportunities for Gestamp Automocion and CIE Automotive
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gestamp and CIE is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Gestamp Automocion SA and CIE Automotive SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIE Automotive SA and Gestamp Automocion 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 Gestamp Automocion SA are associated (or correlated) with CIE Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIE Automotive SA has no effect on the direction of Gestamp Automocion i.e., Gestamp Automocion and CIE Automotive go up and down completely randomly.
Pair Corralation between Gestamp Automocion and CIE Automotive
Assuming the 90 days trading horizon Gestamp Automocion SA is expected to under-perform the CIE Automotive. In addition to that, Gestamp Automocion is 2.12 times more volatile than CIE Automotive SA. It trades about -0.05 of its total potential returns per unit of risk. CIE Automotive SA is currently generating about 0.09 per unit of volatility. If you would invest 2,465 in CIE Automotive SA on August 31, 2024 and sell it today you would earn a total of 60.00 from holding CIE Automotive SA or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gestamp Automocion SA vs. CIE Automotive SA
Performance |
| Timeline |
| Gestamp Automocion |
| CIE Automotive SA |
Gestamp Automocion and CIE Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gestamp Automocion and CIE Automotive
The main advantage of trading using opposite Gestamp Automocion and CIE Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gestamp Automocion position performs unexpectedly, CIE Automotive 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 CIE Automotive will offset losses from the drop in CIE Automotive's long position.| Gestamp Automocion vs. CIE Automotive SA | Gestamp Automocion vs. ENCE Energa y | Gestamp Automocion vs. Global Dominion Access | Gestamp Automocion vs. Viscofan |
| CIE Automotive vs. Viscofan | CIE Automotive vs. Gestamp Automocion SA | CIE Automotive vs. ENCE Energa y | CIE Automotive vs. Acerinox |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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