Correlation Between Compagnie and Globe Trade
Can any of the company-specific risk be diversified away by investing in both Compagnie and Globe Trade 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 Globe Trade 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 Globe Trade Centre, you can compare the effects of market volatilities on Compagnie and Globe Trade 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 Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Globe Trade.
Diversification Opportunities for Compagnie and Globe Trade
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Compagnie and Globe is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and Globe Trade Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Trade Centre 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 Globe Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Trade Centre has no effect on the direction of Compagnie i.e., Compagnie and Globe Trade go up and down completely randomly.
Pair Corralation between Compagnie and Globe Trade
Assuming the 90 days horizon Compagnie de Saint Gobain is expected to generate 7.02 times more return on investment than Globe Trade. However, Compagnie is 7.02 times more volatile than Globe Trade Centre. It trades about 0.16 of its potential returns per unit of risk. Globe Trade Centre is currently generating about -0.21 per unit of risk. If you would invest 8,328 in Compagnie de Saint Gobain on August 28, 2024 and sell it today you would earn a total of 430.00 from holding Compagnie de Saint Gobain or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie de Saint Gobain vs. Globe Trade Centre
Performance |
| Timeline |
| Compagnie de Saint |
| Globe Trade Centre |
Compagnie and Globe Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Globe Trade
The main advantage of trading using opposite Compagnie and Globe Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Globe Trade 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 Globe Trade will offset losses from the drop in Globe Trade's long position.| Compagnie vs. Superior Plus Corp | Compagnie vs. NMI Holdings | Compagnie vs. Origin Agritech | Compagnie vs. SIVERS SEMICONDUCTORS AB |
| Globe Trade vs. Corporate Office Properties | Globe Trade vs. TSOGO SUN GAMING | Globe Trade vs. DFS Furniture PLC | Globe Trade vs. FUTURE GAMING GRP |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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