Correlation Between CFM Indosuez and Maisons Du
Can any of the company-specific risk be diversified away by investing in both CFM Indosuez and Maisons Du 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 CFM Indosuez and Maisons Du into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CFM Indosuez Wealth and Maisons du Monde, you can compare the effects of market volatilities on CFM Indosuez and Maisons Du 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 CFM Indosuez with a short position of Maisons Du. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFM Indosuez and Maisons Du.
Diversification Opportunities for CFM Indosuez and Maisons Du
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CFM and Maisons is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CFM Indosuez Wealth and Maisons du Monde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maisons du Monde and CFM Indosuez 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 CFM Indosuez Wealth are associated (or correlated) with Maisons Du. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maisons du Monde has no effect on the direction of CFM Indosuez i.e., CFM Indosuez and Maisons Du go up and down completely randomly.
Pair Corralation between CFM Indosuez and Maisons Du
Assuming the 90 days trading horizon CFM Indosuez Wealth is expected to generate 0.4 times more return on investment than Maisons Du. However, CFM Indosuez Wealth is 2.48 times less risky than Maisons Du. It trades about 0.03 of its potential returns per unit of risk. Maisons du Monde is currently generating about -0.09 per unit of risk. If you would invest 111,000 in CFM Indosuez Wealth on August 29, 2024 and sell it today you would earn a total of 4,000 from holding CFM Indosuez Wealth or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CFM Indosuez Wealth vs. Maisons du Monde
Performance |
| Timeline |
| CFM Indosuez Wealth |
| Maisons du Monde |
CFM Indosuez and Maisons Du Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFM Indosuez and Maisons Du
The main advantage of trading using opposite CFM Indosuez and Maisons Du positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFM Indosuez position performs unexpectedly, Maisons Du 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 Maisons Du will offset losses from the drop in Maisons Du's long position.| CFM Indosuez vs. Caisse rgionale de | CFM Indosuez vs. Caisse Regionale de | CFM Indosuez vs. Caisse Rgionale du | CFM Indosuez vs. Caisse Regionale de |
| Maisons Du vs. Fnac Darty SA | Maisons Du vs. Trigano SA | Maisons Du vs. Elis SA | Maisons Du vs. Derichebourg |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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