Correlation Between Litigation Capital and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Litigation Capital 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 Litigation Capital and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litigation Capital Management and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Litigation Capital 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 Litigation Capital with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litigation Capital and Compagnie Plastic.
Diversification Opportunities for Litigation Capital and Compagnie Plastic
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Litigation and Compagnie is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Litigation Capital Management 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 Litigation Capital 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 Litigation Capital Management 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 Litigation Capital i.e., Litigation Capital and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Litigation Capital and Compagnie Plastic
Assuming the 90 days trading horizon Litigation Capital Management is expected to under-perform the Compagnie Plastic. But the stock apears to be less risky and, when comparing its historical volatility, Litigation Capital Management is 1.65 times less risky than Compagnie Plastic. The stock trades about -0.1 of its potential returns per unit of risk. The Compagnie Plastic Omnium is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 967.00 in Compagnie Plastic Omnium on October 23, 2024 and sell it today you would earn a total of 112.00 from holding Compagnie Plastic Omnium or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Litigation Capital Management vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Litigation Capital |
| Compagnie Plastic Omnium |
Litigation Capital and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litigation Capital and Compagnie Plastic
The main advantage of trading using opposite Litigation Capital and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litigation Capital 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.| Litigation Capital vs. Catalyst Media Group | Litigation Capital vs. CATLIN GROUP | Litigation Capital vs. Tamburi Investment Partners | Litigation Capital vs. Magnora ASA |
| Compagnie Plastic vs. Moneta Money Bank | Compagnie Plastic vs. Beowulf Mining | Compagnie Plastic vs. Science in Sport | Compagnie Plastic vs. St Galler Kantonalbank |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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