Correlation Between Compagnie Générale and Modine Manufacturing
Can any of the company-specific risk be diversified away by investing in both Compagnie Générale and Modine Manufacturing 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 Générale and Modine Manufacturing 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 Modine Manufacturing, you can compare the effects of market volatilities on Compagnie Générale and Modine Manufacturing 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 Générale with a short position of Modine Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Générale and Modine Manufacturing.
Diversification Opportunities for Compagnie Générale and Modine Manufacturing
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compagnie and Modine is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Gnrale des and Modine Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modine Manufacturing and Compagnie Générale 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 Modine Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modine Manufacturing has no effect on the direction of Compagnie Générale i.e., Compagnie Générale and Modine Manufacturing go up and down completely randomly.
Pair Corralation between Compagnie Générale and Modine Manufacturing
Assuming the 90 days horizon Compagnie Gnrale des is expected to under-perform the Modine Manufacturing. But the pink sheet apears to be less risky and, when comparing its historical volatility, Compagnie Gnrale des is 1.56 times less risky than Modine Manufacturing. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Modine Manufacturing is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 13,031 in Modine Manufacturing on August 30, 2024 and sell it today you would earn a total of 306.00 from holding Modine Manufacturing or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Gnrale des vs. Modine Manufacturing
Performance |
| Timeline |
| Compagnie Gnrale des |
| Modine Manufacturing |
Compagnie Générale and Modine Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Générale and Modine Manufacturing
The main advantage of trading using opposite Compagnie Générale and Modine Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Générale position performs unexpectedly, Modine Manufacturing 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 Modine Manufacturing will offset losses from the drop in Modine Manufacturing's long position.| Compagnie Générale vs. Continental AG PK | Compagnie Générale vs. Bridgestone Corp ADR | Compagnie Générale vs. Continental Aktiengesellschaft | Compagnie Générale vs. Douglas Dynamics |
| Modine Manufacturing vs. Ford Motor | Modine Manufacturing vs. General Motors | Modine Manufacturing vs. Goodyear Tire Rubber | Modine Manufacturing vs. Li Auto |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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