Correlation Between Goodyear Tire and Compagnie Generale
Can any of the company-specific risk be diversified away by investing in both Goodyear Tire and Compagnie Generale 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 Goodyear Tire and Compagnie Generale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodyear Tire Rubber and Compagnie Generale des, you can compare the effects of market volatilities on Goodyear Tire and Compagnie Generale 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 Goodyear Tire with a short position of Compagnie Generale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodyear Tire and Compagnie Generale.
Diversification Opportunities for Goodyear Tire and Compagnie Generale
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goodyear and Compagnie is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Goodyear Tire Rubber and Compagnie Generale des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Generale des and Goodyear Tire 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 Goodyear Tire Rubber are associated (or correlated) with Compagnie Generale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Generale des has no effect on the direction of Goodyear Tire i.e., Goodyear Tire and Compagnie Generale go up and down completely randomly.
Pair Corralation between Goodyear Tire and Compagnie Generale
Allowing for the 90-day total investment horizon Goodyear Tire is expected to generate 9.5 times less return on investment than Compagnie Generale. In addition to that, Goodyear Tire is 1.27 times more volatile than Compagnie Generale des. It trades about 0.02 of its total potential returns per unit of risk. Compagnie Generale des is currently generating about 0.25 per unit of volatility. If you would invest 1,609 in Compagnie Generale des on November 4, 2024 and sell it today you would earn a total of 123.00 from holding Compagnie Generale des or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodyear Tire Rubber vs. Compagnie Generale des
Performance |
| Timeline |
| Goodyear Tire Rubber |
| Compagnie Generale des |
Goodyear Tire and Compagnie Generale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodyear Tire and Compagnie Generale
The main advantage of trading using opposite Goodyear Tire and Compagnie Generale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodyear Tire position performs unexpectedly, Compagnie Generale 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 Generale will offset losses from the drop in Compagnie Generale's long position.| Goodyear Tire vs. Allison Transmission Holdings | Goodyear Tire vs. Aptiv PLC | Goodyear Tire vs. LKQ Corporation | Goodyear Tire vs. Lear Corporation |
| Compagnie Generale vs. Continental Aktiengesellschaft | Compagnie Generale vs. Bridgestone Corp ADR | Compagnie Generale vs. Goodyear Tire Rubber | Compagnie Generale vs. Brembo SpA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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