Correlation Between CMG Cleantech and Fiducial Office
Can any of the company-specific risk be diversified away by investing in both CMG Cleantech and Fiducial Office 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 Fiducial Office 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 Fiducial Office Solutions, you can compare the effects of market volatilities on CMG Cleantech and Fiducial Office 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 Fiducial Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMG Cleantech and Fiducial Office.
Diversification Opportunities for CMG Cleantech and Fiducial Office
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CMG and Fiducial is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CMG Cleantech SA and Fiducial Office Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiducial Office Solutions 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 Fiducial Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiducial Office Solutions has no effect on the direction of CMG Cleantech i.e., CMG Cleantech and Fiducial Office go up and down completely randomly.
Pair Corralation between CMG Cleantech and Fiducial Office
Assuming the 90 days trading horizon CMG Cleantech SA is expected to generate 11.32 times more return on investment than Fiducial Office. However, CMG Cleantech is 11.32 times more volatile than Fiducial Office Solutions. It trades about 0.06 of its potential returns per unit of risk. Fiducial Office Solutions is currently generating about -0.04 per unit of risk. If you would invest 77.00 in CMG Cleantech SA on November 28, 2024 and sell it today you would earn a total of 22.00 from holding CMG Cleantech SA or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CMG Cleantech SA vs. Fiducial Office Solutions
Performance |
| Timeline |
| CMG Cleantech SA |
| Fiducial Office Solutions |
CMG Cleantech and Fiducial Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMG Cleantech and Fiducial Office
The main advantage of trading using opposite CMG Cleantech and Fiducial Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMG Cleantech position performs unexpectedly, Fiducial Office 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 Fiducial Office will offset losses from the drop in Fiducial Office's long position.| CMG Cleantech vs. EPC Groupe | CMG Cleantech vs. Groupe Sfpi | CMG Cleantech vs. Baikowski SASU | CMG Cleantech vs. NSE 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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