Correlation Between Nicolas Correa and CIE Automotive
Can any of the company-specific risk be diversified away by investing in both Nicolas Correa and CIE Automotive 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 Nicolas Correa and CIE Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicolas Correa SA and CIE Automotive SA, you can compare the effects of market volatilities on Nicolas Correa and CIE Automotive 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 Nicolas Correa with a short position of CIE Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicolas Correa and CIE Automotive.
Diversification Opportunities for Nicolas Correa and CIE Automotive
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nicolas and CIE is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nicolas Correa SA and CIE Automotive SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIE Automotive SA and Nicolas Correa 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 Nicolas Correa SA are associated (or correlated) with CIE Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIE Automotive SA has no effect on the direction of Nicolas Correa i.e., Nicolas Correa and CIE Automotive go up and down completely randomly.
Pair Corralation between Nicolas Correa and CIE Automotive
Assuming the 90 days trading horizon Nicolas Correa SA is expected to generate 1.2 times more return on investment than CIE Automotive. However, Nicolas Correa is 1.2 times more volatile than CIE Automotive SA. It trades about 0.05 of its potential returns per unit of risk. CIE Automotive SA is currently generating about -0.01 per unit of risk. If you would invest 547.00 in Nicolas Correa SA on August 29, 2024 and sell it today you would earn a total of 169.00 from holding Nicolas Correa SA or generate 30.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.51% |
| Values | Daily Returns |
Nicolas Correa SA vs. CIE Automotive SA
Performance |
| Timeline |
| Nicolas Correa SA |
| CIE Automotive SA |
Nicolas Correa and CIE Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicolas Correa and CIE Automotive
The main advantage of trading using opposite Nicolas Correa and CIE Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicolas Correa position performs unexpectedly, CIE Automotive 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 CIE Automotive will offset losses from the drop in CIE Automotive's long position.| Nicolas Correa vs. Labiana Health SA | Nicolas Correa vs. NH Hoteles | Nicolas Correa vs. Energy Solar Tech | Nicolas Correa vs. Plasticos Compuestos SA |
| CIE Automotive vs. Viscofan | CIE Automotive vs. Gestamp Automocion SA | CIE Automotive vs. ENCE Energa y | CIE Automotive vs. Acerinox |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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