Correlation Between Compagnie and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Compagnie and Superior Plus 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 and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie de Saint Gobain and Superior Plus Corp, you can compare the effects of market volatilities on Compagnie and Superior Plus 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 with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Superior Plus.
Diversification Opportunities for Compagnie and Superior Plus
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compagnie and Superior is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and Compagnie 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 de Saint Gobain are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Compagnie i.e., Compagnie and Superior Plus go up and down completely randomly.
Pair Corralation between Compagnie and Superior Plus
Assuming the 90 days horizon Compagnie de Saint Gobain is expected to generate 0.68 times more return on investment than Superior Plus. However, Compagnie de Saint Gobain is 1.47 times less risky than Superior Plus. It trades about 0.09 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.06 per unit of risk. If you would invest 6,505 in Compagnie de Saint Gobain on August 25, 2024 and sell it today you would earn a total of 2,269 from holding Compagnie de Saint Gobain or generate 34.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie de Saint Gobain vs. Superior Plus Corp
Performance |
| Timeline |
| Compagnie de Saint |
| Superior Plus Corp |
Compagnie and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Superior Plus
The main advantage of trading using opposite Compagnie and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Compagnie vs. HeidelbergCement AG | Compagnie vs. Superior Plus Corp | Compagnie vs. NMI Holdings | Compagnie vs. Origin Agritech |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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