Correlation Between Eversource Energy and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Eversource Energy and Compagnie Plastic 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 Eversource Energy and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eversource Energy and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Eversource Energy and Compagnie Plastic 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 Eversource Energy with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eversource Energy and Compagnie Plastic.
Diversification Opportunities for Eversource Energy and Compagnie Plastic
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eversource and Compagnie is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eversource Energy and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium and Eversource Energy 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 Eversource Energy are associated (or correlated) with Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Eversource Energy i.e., Eversource Energy and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Eversource Energy and Compagnie Plastic
Assuming the 90 days horizon Eversource Energy is expected to generate 0.68 times more return on investment than Compagnie Plastic. However, Eversource Energy is 1.46 times less risky than Compagnie Plastic. It trades about -0.02 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.02 per unit of risk. If you would invest 7,418 in Eversource Energy on September 3, 2024 and sell it today you would lose (1,318) from holding Eversource Energy or give up 17.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eversource Energy vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Eversource Energy |
| Compagnie Plastic Omnium |
Eversource Energy and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eversource Energy and Compagnie Plastic
The main advantage of trading using opposite Eversource Energy and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eversource Energy position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Eversource Energy vs. Compagnie Plastic Omnium | Eversource Energy vs. Materialise NV | Eversource Energy vs. Goodyear Tire Rubber | Eversource Energy vs. LION ONE METALS |
| Compagnie Plastic vs. Dno ASA | Compagnie Plastic vs. PT Astra International | Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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