Correlation Between Wendel and CBO Territoria
Can any of the company-specific risk be diversified away by investing in both Wendel and CBO Territoria 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 Wendel and CBO Territoria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wendel and CBO Territoria SA, you can compare the effects of market volatilities on Wendel and CBO Territoria 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 Wendel with a short position of CBO Territoria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wendel and CBO Territoria.
Diversification Opportunities for Wendel and CBO Territoria
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wendel and CBO is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Wendel and CBO Territoria SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBO Territoria SA and Wendel 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 Wendel are associated (or correlated) with CBO Territoria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBO Territoria SA has no effect on the direction of Wendel i.e., Wendel and CBO Territoria go up and down completely randomly.
Pair Corralation between Wendel and CBO Territoria
Assuming the 90 days horizon Wendel is expected to generate 2.25 times more return on investment than CBO Territoria. However, Wendel is 2.25 times more volatile than CBO Territoria SA. It trades about 0.07 of its potential returns per unit of risk. CBO Territoria SA is currently generating about 0.05 per unit of risk. If you would invest 8,076 in Wendel on August 28, 2024 and sell it today you would earn a total of 1,349 from holding Wendel or generate 16.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.53% |
| Values | Daily Returns |
Wendel vs. CBO Territoria SA
Performance |
| Timeline |
| Wendel |
| CBO Territoria SA |
Wendel and CBO Territoria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wendel and CBO Territoria
The main advantage of trading using opposite Wendel and CBO Territoria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendel position performs unexpectedly, CBO Territoria 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 CBO Territoria will offset losses from the drop in CBO Territoria's long position.The idea behind Wendel and CBO Territoria SA 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.| CBO Territoria vs. Fonciere Lyonnaise | CBO Territoria vs. Immobiliere Dassault SA | CBO Territoria vs. Frey SA |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |