Correlation Between Qingling Motors and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Qingling Motors 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 Qingling Motors and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qingling Motors Co and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Qingling Motors 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 Qingling Motors with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingling Motors and Compagnie Plastic.
Diversification Opportunities for Qingling Motors and Compagnie Plastic
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Qingling and Compagnie is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Qingling Motors Co 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 Qingling Motors 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 Qingling Motors Co 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 Qingling Motors i.e., Qingling Motors and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Qingling Motors and Compagnie Plastic
Assuming the 90 days horizon Qingling Motors Co is expected to generate 0.89 times more return on investment than Compagnie Plastic. However, Qingling Motors Co is 1.12 times less risky than Compagnie Plastic. It trades about 0.24 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about 0.2 per unit of risk. If you would invest 5.60 in Qingling Motors Co on September 15, 2024 and sell it today you would earn a total of 0.76 from holding Qingling Motors Co or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingling Motors Co vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Qingling Motors |
| Compagnie Plastic Omnium |
Qingling Motors and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingling Motors and Compagnie Plastic
The main advantage of trading using opposite Qingling Motors and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingling Motors 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.| Qingling Motors vs. Heidelberg Materials AG | Qingling Motors vs. Host Hotels Resorts | Qingling Motors vs. Compagnie Plastic Omnium | Qingling Motors vs. INTERCONT HOTELS |
| Compagnie Plastic vs. Eastman Chemical | Compagnie Plastic vs. Perdoceo Education | Compagnie Plastic vs. CHINA EDUCATION GROUP | Compagnie Plastic vs. CAREER EDUCATION |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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