Correlation Between INDIKA ENERGY and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both INDIKA ENERGY 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 INDIKA ENERGY and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDIKA ENERGY and Compagnie Plastic Omnium, you can compare the effects of market volatilities on INDIKA ENERGY 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 INDIKA ENERGY with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDIKA ENERGY and Compagnie Plastic.
Diversification Opportunities for INDIKA ENERGY and Compagnie Plastic
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between INDIKA and Compagnie is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding INDIKA 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 INDIKA ENERGY 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 INDIKA 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 INDIKA ENERGY i.e., INDIKA ENERGY and Compagnie Plastic go up and down completely randomly.
Pair Corralation between INDIKA ENERGY and Compagnie Plastic
Assuming the 90 days trading horizon INDIKA ENERGY is expected to generate 2.02 times more return on investment than Compagnie Plastic. However, INDIKA ENERGY is 2.02 times more volatile than Compagnie Plastic Omnium. It trades about -0.01 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.02 per unit of risk. If you would invest 16.00 in INDIKA ENERGY on September 4, 2024 and sell it today you would lose (8.45) from holding INDIKA ENERGY or give up 52.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
INDIKA ENERGY vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| INDIKA ENERGY |
| Compagnie Plastic Omnium |
INDIKA ENERGY and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDIKA ENERGY and Compagnie Plastic
The main advantage of trading using opposite INDIKA ENERGY and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDIKA ENERGY 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.| INDIKA ENERGY vs. TOTAL GABON | INDIKA ENERGY vs. Walgreens Boots Alliance | INDIKA ENERGY vs. Peak Resources Limited |
| Compagnie Plastic vs. Martin Marietta Materials | Compagnie Plastic vs. Consolidated Communications Holdings | Compagnie Plastic vs. Spirent Communications plc | Compagnie Plastic vs. ITALIAN WINE BRANDS |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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