Correlation Between GURU ORGANIC and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both GURU ORGANIC and Compagnie Plastic 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 GURU ORGANIC and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GURU ORGANIC ENERGY and Compagnie Plastic Omnium, you can compare the effects of market volatilities on GURU ORGANIC and Compagnie Plastic 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 GURU ORGANIC with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of GURU ORGANIC and Compagnie Plastic.
Diversification Opportunities for GURU ORGANIC and Compagnie Plastic
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GURU and Compagnie is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding GURU ORGANIC ENERGY and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium and GURU ORGANIC 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 GURU ORGANIC ENERGY are associated (or correlated) with Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of GURU ORGANIC i.e., GURU ORGANIC and Compagnie Plastic go up and down completely randomly.
Pair Corralation between GURU ORGANIC and Compagnie Plastic
Assuming the 90 days horizon GURU ORGANIC ENERGY is expected to generate 2.72 times more return on investment than Compagnie Plastic. However, GURU ORGANIC is 2.72 times more volatile than Compagnie Plastic Omnium. It trades about 0.2 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about 0.18 per unit of risk. If you would invest 88.00 in GURU ORGANIC ENERGY on November 5, 2024 and sell it today you would earn a total of 23.00 from holding GURU ORGANIC ENERGY or generate 26.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GURU ORGANIC ENERGY vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| GURU ORGANIC ENERGY |
| Compagnie Plastic Omnium |
GURU ORGANIC and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GURU ORGANIC and Compagnie Plastic
The main advantage of trading using opposite GURU ORGANIC and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GURU ORGANIC position performs unexpectedly, Compagnie Plastic 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 Plastic will offset losses from the drop in Compagnie Plastic's long position.| GURU ORGANIC vs. Apple Inc | GURU ORGANIC vs. Apple Inc | GURU ORGANIC vs. Apple Inc | GURU ORGANIC vs. Apple Inc |
| Compagnie Plastic vs. UNITED UTILITIES GR | Compagnie Plastic vs. Chesapeake Utilities | Compagnie Plastic vs. LPKF Laser Electronics | Compagnie Plastic vs. Cogent Communications Holdings |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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