Correlation Between Morgan Advanced and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Morgan Advanced 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 Morgan Advanced and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Advanced Materials and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Morgan Advanced 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 Morgan Advanced with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Advanced and Compagnie Plastic.
Diversification Opportunities for Morgan Advanced and Compagnie Plastic
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and Compagnie is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Advanced Materials 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 Morgan Advanced 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 Morgan Advanced Materials 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 Morgan Advanced i.e., Morgan Advanced and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Morgan Advanced and Compagnie Plastic
Assuming the 90 days trading horizon Morgan Advanced Materials is expected to generate 0.6 times more return on investment than Compagnie Plastic. However, Morgan Advanced Materials is 1.66 times less risky than Compagnie Plastic. It trades about -0.06 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.05 per unit of risk. If you would invest 30,498 in Morgan Advanced Materials on September 3, 2024 and sell it today you would lose (3,948) from holding Morgan Advanced Materials or give up 12.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Advanced Materials vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Morgan Advanced Materials |
| Compagnie Plastic Omnium |
Morgan Advanced and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Advanced and Compagnie Plastic
The main advantage of trading using opposite Morgan Advanced and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Advanced 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.| Morgan Advanced vs. Bell Food Group | Morgan Advanced vs. Verizon Communications | Morgan Advanced vs. Fevertree Drinks Plc | Morgan Advanced vs. Tyson Foods Cl |
| Compagnie Plastic vs. Catalyst Media Group | Compagnie Plastic vs. CATLIN GROUP | Compagnie Plastic vs. Magnora ASA | Compagnie Plastic vs. RTW Venture Fund |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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