Correlation Between CMG Cleantech and ST Dupont
Can any of the company-specific risk be diversified away by investing in both CMG Cleantech and ST Dupont 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 CMG Cleantech and ST Dupont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMG Cleantech SA and ST Dupont, you can compare the effects of market volatilities on CMG Cleantech and ST Dupont 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 CMG Cleantech with a short position of ST Dupont. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMG Cleantech and ST Dupont.
Diversification Opportunities for CMG Cleantech and ST Dupont
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CMG and DPT is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding CMG Cleantech SA and ST Dupont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ST Dupont and CMG Cleantech 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 CMG Cleantech SA are associated (or correlated) with ST Dupont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ST Dupont has no effect on the direction of CMG Cleantech i.e., CMG Cleantech and ST Dupont go up and down completely randomly.
Pair Corralation between CMG Cleantech and ST Dupont
Assuming the 90 days trading horizon CMG Cleantech SA is expected to under-perform the ST Dupont. In addition to that, CMG Cleantech is 1.56 times more volatile than ST Dupont. It trades about -0.01 of its total potential returns per unit of risk. ST Dupont is currently generating about 0.0 per unit of volatility. If you would invest 12.00 in ST Dupont on August 30, 2024 and sell it today you would lose (4.00) from holding ST Dupont or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.63% |
| Values | Daily Returns |
CMG Cleantech SA vs. ST Dupont
Performance |
| Timeline |
| CMG Cleantech SA |
| ST Dupont |
CMG Cleantech and ST Dupont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMG Cleantech and ST Dupont
The main advantage of trading using opposite CMG Cleantech and ST Dupont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMG Cleantech position performs unexpectedly, ST Dupont 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 ST Dupont will offset losses from the drop in ST Dupont's long position.| CMG Cleantech vs. EPC Groupe | CMG Cleantech vs. Groupe Sfpi | CMG Cleantech vs. NSE SA | CMG Cleantech vs. Manitou BF SA |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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