Correlation Between Compagnie and Media
Can any of the company-specific risk be diversified away by investing in both Compagnie and Media 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 Media 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 Media and Games, you can compare the effects of market volatilities on Compagnie and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Media.
Diversification Opportunities for Compagnie and Media
Poor diversification
The 3 months correlation between Compagnie and Media is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Compagnie i.e., Compagnie and Media go up and down completely randomly.
Pair Corralation between Compagnie and Media
Assuming the 90 days horizon Compagnie de Saint Gobain is expected to generate 0.38 times more return on investment than Media. However, Compagnie de Saint Gobain is 2.64 times less risky than Media. It trades about 0.13 of its potential returns per unit of risk. Media and Games is currently generating about -0.11 per unit of risk. If you would invest 8,240 in Compagnie de Saint Gobain on September 1, 2024 and sell it today you would earn a total of 364.00 from holding Compagnie de Saint Gobain or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Compagnie de Saint Gobain vs. Media and Games
Performance |
| Timeline |
| Compagnie de Saint |
| Media and Games |
Compagnie and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Media
The main advantage of trading using opposite Compagnie and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.| Compagnie vs. Media and Games | Compagnie vs. CODERE ONLINE LUX | Compagnie vs. Zoom Video Communications | Compagnie vs. GungHo Online Entertainment |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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