Correlation Between Cia De and Global Dominion
Can any of the company-specific risk be diversified away by investing in both Cia De and Global Dominion 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 Cia De and Global Dominion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cia de Distribucion and Global Dominion Access, you can compare the effects of market volatilities on Cia De and Global Dominion 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 Cia De with a short position of Global Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cia De and Global Dominion.
Diversification Opportunities for Cia De and Global Dominion
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cia and Global is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cia de Distribucion and Global Dominion Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Dominion Access and Cia De 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 Cia de Distribucion are associated (or correlated) with Global Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Dominion Access has no effect on the direction of Cia De i.e., Cia De and Global Dominion go up and down completely randomly.
Pair Corralation between Cia De and Global Dominion
Assuming the 90 days trading horizon Cia de Distribucion is expected to generate 0.4 times more return on investment than Global Dominion. However, Cia de Distribucion is 2.48 times less risky than Global Dominion. It trades about 0.07 of its potential returns per unit of risk. Global Dominion Access is currently generating about -0.11 per unit of risk. If you would invest 2,777 in Cia de Distribucion on November 29, 2024 and sell it today you would earn a total of 33.00 from holding Cia de Distribucion or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cia de Distribucion vs. Global Dominion Access
Performance |
| Timeline |
| Cia de Distribucion |
| Global Dominion Access |
Cia De and Global Dominion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cia De and Global Dominion
The main advantage of trading using opposite Cia De and Global Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cia De position performs unexpectedly, Global Dominion 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 Global Dominion will offset losses from the drop in Global Dominion's long position.The idea behind Cia de Distribucion and Global Dominion Access pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Global Dominion vs. CIE Automotive SA | Global Dominion vs. Gestamp Automocion SA | Global Dominion vs. Vidrala SA | Global Dominion vs. Miquel y Costas |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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