Correlation Between Compagnie Gnrale and Bridgestone
Can any of the company-specific risk be diversified away by investing in both Compagnie Gnrale and Bridgestone 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 Compagnie Gnrale and Bridgestone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Gnrale des and Bridgestone, you can compare the effects of market volatilities on Compagnie Gnrale and Bridgestone 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 Compagnie Gnrale with a short position of Bridgestone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Gnrale and Bridgestone.
Diversification Opportunities for Compagnie Gnrale and Bridgestone
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Compagnie and Bridgestone is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Gnrale des and Bridgestone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgestone and Compagnie Gnrale 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 Compagnie Gnrale des are associated (or correlated) with Bridgestone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgestone has no effect on the direction of Compagnie Gnrale i.e., Compagnie Gnrale and Bridgestone go up and down completely randomly.
Pair Corralation between Compagnie Gnrale and Bridgestone
Assuming the 90 days horizon Compagnie Gnrale des is expected to generate 1.06 times more return on investment than Bridgestone. However, Compagnie Gnrale is 1.06 times more volatile than Bridgestone. It trades about 0.05 of its potential returns per unit of risk. Bridgestone is currently generating about 0.03 per unit of risk. If you would invest 3,212 in Compagnie Gnrale des on October 23, 2024 and sell it today you would earn a total of 167.00 from holding Compagnie Gnrale des or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Gnrale des vs. Bridgestone
Performance |
| Timeline |
| Compagnie Gnrale des |
| Bridgestone |
Compagnie Gnrale and Bridgestone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Gnrale and Bridgestone
The main advantage of trading using opposite Compagnie Gnrale and Bridgestone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Gnrale position performs unexpectedly, Bridgestone 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 Bridgestone will offset losses from the drop in Bridgestone's long position.| Compagnie Gnrale vs. Continental AG PK | Compagnie Gnrale vs. Bridgestone Corp ADR | Compagnie Gnrale vs. Continental Aktiengesellschaft | Compagnie Gnrale vs. Douglas Dynamics |
| Bridgestone vs. Compagnie Gnrale des | Bridgestone vs. Continental AG PK | Bridgestone vs. Bridgestone Corp ADR | Bridgestone vs. Continental Aktiengesellschaft |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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