Correlation Between Reinsurance Group and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group 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 Reinsurance Group and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinsurance Group of and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Reinsurance Group 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 Reinsurance Group with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and Compagnie Plastic.
Diversification Opportunities for Reinsurance Group and Compagnie Plastic
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Reinsurance and Compagnie is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of 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 Reinsurance Group 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 Reinsurance Group of 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 Reinsurance Group i.e., Reinsurance Group and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Reinsurance Group and Compagnie Plastic
Assuming the 90 days trading horizon Reinsurance Group of is expected to under-perform the Compagnie Plastic. But the stock apears to be less risky and, when comparing its historical volatility, Reinsurance Group of is 1.62 times less risky than Compagnie Plastic. The stock trades about -0.04 of its potential returns per unit of risk. The Compagnie Plastic Omnium is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 808.00 in Compagnie Plastic Omnium on October 25, 2024 and sell it today you would earn a total of 258.00 from holding Compagnie Plastic Omnium or generate 31.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Reinsurance Group |
| Compagnie Plastic Omnium |
Reinsurance Group and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and Compagnie Plastic
The main advantage of trading using opposite Reinsurance Group and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group 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.| Reinsurance Group vs. Charter Communications | Reinsurance Group vs. Laureate Education | Reinsurance Group vs. MAVEN WIRELESS SWEDEN | Reinsurance Group vs. IDP EDUCATION LTD |
| Compagnie Plastic vs. Dno ASA | Compagnie Plastic vs. DENSO P ADR | Compagnie Plastic vs. Aptiv PLC | Compagnie Plastic vs. Bridgestone |
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.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |