Correlation Between CMG Cleantech and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both CMG Cleantech and Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement VE, you can compare the effects of market volatilities on CMG Cleantech and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMG Cleantech and Veolia Environnement.
Diversification Opportunities for CMG Cleantech and Veolia Environnement
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CMG and Veolia is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding CMG Cleantech SA and Veolia Environnement VE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of CMG Cleantech i.e., CMG Cleantech and Veolia Environnement go up and down completely randomly.
Pair Corralation between CMG Cleantech and Veolia Environnement
Assuming the 90 days trading horizon CMG Cleantech SA is expected to generate 1.0 times more return on investment than Veolia Environnement. However, CMG Cleantech SA is 1.0 times less risky than Veolia Environnement. It trades about 0.0 of its potential returns per unit of risk. Veolia Environnement VE is currently generating about -0.33 per unit of risk. If you would invest 120.00 in CMG Cleantech SA on August 27, 2024 and sell it today you would earn a total of 0.00 from holding CMG Cleantech SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CMG Cleantech SA vs. Veolia Environnement VE
Performance |
| Timeline |
| CMG Cleantech SA |
| Veolia Environnement |
CMG Cleantech and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMG Cleantech and Veolia Environnement
The main advantage of trading using opposite CMG Cleantech and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMG Cleantech position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| CMG Cleantech vs. EPC Groupe | CMG Cleantech vs. Groupe Sfpi | CMG Cleantech vs. Baikowski SASU | CMG Cleantech vs. NSE SA |
| Veolia Environnement vs. Neoen SA | Veolia Environnement vs. Gaztransport Technigaz SAS | Veolia Environnement vs. Carbios | Veolia Environnement 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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