Correlation Between Compagnie Generale and SwissCom
Can any of the company-specific risk be diversified away by investing in both Compagnie Generale and SwissCom 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 SwissCom 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 SwissCom AG, you can compare the effects of market volatilities on Compagnie Generale and SwissCom 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 SwissCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Generale and SwissCom.
Diversification Opportunities for Compagnie Generale and SwissCom
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Compagnie and SwissCom is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Generale des and SwissCom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SwissCom AG 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 SwissCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SwissCom AG has no effect on the direction of Compagnie Generale i.e., Compagnie Generale and SwissCom go up and down completely randomly.
Pair Corralation between Compagnie Generale and SwissCom
Assuming the 90 days horizon Compagnie Generale des is expected to generate 1.13 times more return on investment than SwissCom. However, Compagnie Generale is 1.13 times more volatile than SwissCom AG. It trades about 0.06 of its potential returns per unit of risk. SwissCom AG is currently generating about -0.1 per unit of risk. If you would invest 1,673 in Compagnie Generale des on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Compagnie Generale des or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Generale des vs. SwissCom AG
Performance |
| Timeline |
| Compagnie Generale des |
| SwissCom AG |
Compagnie Generale and SwissCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Generale and SwissCom
The main advantage of trading using opposite Compagnie Generale and SwissCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Generale position performs unexpectedly, SwissCom 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 SwissCom will offset losses from the drop in SwissCom's long position.| Compagnie Generale vs. Continental Aktiengesellschaft | Compagnie Generale vs. Bridgestone Corp ADR | Compagnie Generale vs. Goodyear Tire Rubber | Compagnie Generale vs. Brembo SpA |
| SwissCom vs. Telecom Argentina SA | SwissCom vs. Rogers Communications | SwissCom vs. Magyar Telekom Plc | SwissCom vs. Hellenic Telecommunications Org |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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