Correlation Between COMPUTERSHARE and Carrefour
Can any of the company-specific risk be diversified away by investing in both COMPUTERSHARE and Carrefour 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 COMPUTERSHARE and Carrefour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMPUTERSHARE and Carrefour SA, you can compare the effects of market volatilities on COMPUTERSHARE and Carrefour 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 COMPUTERSHARE with a short position of Carrefour. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMPUTERSHARE and Carrefour.
Diversification Opportunities for COMPUTERSHARE and Carrefour
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COMPUTERSHARE and Carrefour is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding COMPUTERSHARE and Carrefour SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrefour SA and COMPUTERSHARE 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 COMPUTERSHARE are associated (or correlated) with Carrefour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrefour SA has no effect on the direction of COMPUTERSHARE i.e., COMPUTERSHARE and Carrefour go up and down completely randomly.
Pair Corralation between COMPUTERSHARE and Carrefour
Assuming the 90 days trading horizon COMPUTERSHARE is expected to generate 1.13 times more return on investment than Carrefour. However, COMPUTERSHARE is 1.13 times more volatile than Carrefour SA. It trades about 0.41 of its potential returns per unit of risk. Carrefour SA is currently generating about 0.01 per unit of risk. If you would invest 1,590 in COMPUTERSHARE on August 28, 2024 and sell it today you would earn a total of 320.00 from holding COMPUTERSHARE or generate 20.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMPUTERSHARE vs. Carrefour SA
Performance |
| Timeline |
| COMPUTERSHARE |
| Carrefour SA |
COMPUTERSHARE and Carrefour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMPUTERSHARE and Carrefour
The main advantage of trading using opposite COMPUTERSHARE and Carrefour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMPUTERSHARE position performs unexpectedly, Carrefour 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 Carrefour will offset losses from the drop in Carrefour's long position.| COMPUTERSHARE vs. Materialise NV | COMPUTERSHARE vs. THRACE PLASTICS | COMPUTERSHARE vs. Vulcan Materials | COMPUTERSHARE vs. UNITED UTILITIES GR |
| Carrefour vs. Superior Plus Corp | Carrefour vs. NMI Holdings | Carrefour vs. Origin Agritech | Carrefour vs. SIVERS SEMICONDUCTORS AB |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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