Correlation Between Compagnie Generale and Daiwa House
Can any of the company-specific risk be diversified away by investing in both Compagnie Generale and Daiwa House 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 Generale and Daiwa House into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Generale des and Daiwa House Industry, you can compare the effects of market volatilities on Compagnie Generale and Daiwa House 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 Generale with a short position of Daiwa House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Generale and Daiwa House.
Diversification Opportunities for Compagnie Generale and Daiwa House
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Compagnie and Daiwa is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Generale des and Daiwa House Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiwa House Industry and Compagnie Generale 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 Generale des are associated (or correlated) with Daiwa House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiwa House Industry has no effect on the direction of Compagnie Generale i.e., Compagnie Generale and Daiwa House go up and down completely randomly.
Pair Corralation between Compagnie Generale and Daiwa House
Assuming the 90 days horizon Compagnie Generale des is expected to under-perform the Daiwa House. But the pink sheet apears to be less risky and, when comparing its historical volatility, Compagnie Generale des is 1.03 times less risky than Daiwa House. The pink sheet trades about -0.14 of its potential returns per unit of risk. The Daiwa House Industry is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,978 in Daiwa House Industry on September 1, 2024 and sell it today you would earn a total of 169.00 from holding Daiwa House Industry or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Compagnie Generale des vs. Daiwa House Industry
Performance |
| Timeline |
| Compagnie Generale des |
| Daiwa House Industry |
Compagnie Generale and Daiwa House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Generale and Daiwa House
The main advantage of trading using opposite Compagnie Generale and Daiwa House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Generale position performs unexpectedly, Daiwa House 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 Daiwa House will offset losses from the drop in Daiwa House's long position.| Compagnie Generale vs. Allison Transmission Holdings | Compagnie Generale vs. Luminar Technologies | Compagnie Generale vs. Quantumscape Corp | Compagnie Generale vs. Lear Corporation |
| Daiwa House vs. Sino Land Co | Daiwa House vs. Sun Hung Kai | Daiwa House vs. Holiday Island Holdings | Daiwa House vs. China Overseas Land |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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