Correlation Between FIREWEED METALS and Compagnie
Can any of the company-specific risk be diversified away by investing in both FIREWEED METALS and Compagnie 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 FIREWEED METALS and Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIREWEED METALS P and Compagnie de Saint Gobain, you can compare the effects of market volatilities on FIREWEED METALS and Compagnie 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 FIREWEED METALS with a short position of Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIREWEED METALS and Compagnie.
Diversification Opportunities for FIREWEED METALS and Compagnie
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIREWEED and Compagnie is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding FIREWEED METALS P and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint and FIREWEED METALS 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 FIREWEED METALS P are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of FIREWEED METALS i.e., FIREWEED METALS and Compagnie go up and down completely randomly.
Pair Corralation between FIREWEED METALS and Compagnie
Assuming the 90 days horizon FIREWEED METALS P is expected to generate 2.36 times more return on investment than Compagnie. However, FIREWEED METALS is 2.36 times more volatile than Compagnie de Saint Gobain. It trades about 0.04 of its potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about 0.08 per unit of risk. If you would invest 64.00 in FIREWEED METALS P on October 31, 2024 and sell it today you would earn a total of 37.00 from holding FIREWEED METALS P or generate 57.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
FIREWEED METALS P vs. Compagnie de Saint Gobain
Performance |
| Timeline |
| FIREWEED METALS P |
| Compagnie de Saint |
FIREWEED METALS and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIREWEED METALS and Compagnie
The main advantage of trading using opposite FIREWEED METALS and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIREWEED METALS position performs unexpectedly, Compagnie 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 will offset losses from the drop in Compagnie's long position.| FIREWEED METALS vs. MCEWEN MINING INC | FIREWEED METALS vs. Richardson Electronics | FIREWEED METALS vs. Harmony Gold Mining | FIREWEED METALS vs. LPKF Laser Electronics |
| Compagnie vs. CNVISION MEDIA | Compagnie vs. ATRESMEDIA | Compagnie vs. NAKED WINES PLC | Compagnie vs. De Grey Mining |
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 CEOs Directory module to screen CEOs from public companies around the world.
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