Correlation Between Compagnie Financière and KERINGUNSPADR 1/10
Can any of the company-specific risk be diversified away by investing in both Compagnie Financière and KERINGUNSPADR 1/10 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 Compagnie Financière and KERINGUNSPADR 1/10 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Financire Richemont and KERINGUNSPADR 110 EO, you can compare the effects of market volatilities on Compagnie Financière and KERINGUNSPADR 1/10 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 Compagnie Financière with a short position of KERINGUNSPADR 1/10. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Financière and KERINGUNSPADR 1/10.
Diversification Opportunities for Compagnie Financière and KERINGUNSPADR 1/10
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compagnie and KERINGUNSPADR is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Financire Richemont and KERINGUNSPADR 110 EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KERINGUNSPADR 1/10 and Compagnie Financière 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 Compagnie Financire Richemont are associated (or correlated) with KERINGUNSPADR 1/10. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KERINGUNSPADR 1/10 has no effect on the direction of Compagnie Financière i.e., Compagnie Financière and KERINGUNSPADR 1/10 go up and down completely randomly.
Pair Corralation between Compagnie Financière and KERINGUNSPADR 1/10
Assuming the 90 days trading horizon Compagnie Financire Richemont is expected to generate 0.95 times more return on investment than KERINGUNSPADR 1/10. However, Compagnie Financire Richemont is 1.06 times less risky than KERINGUNSPADR 1/10. It trades about 0.08 of its potential returns per unit of risk. KERINGUNSPADR 110 EO is currently generating about -0.01 per unit of risk. If you would invest 1,350 in Compagnie Financire Richemont on October 14, 2024 and sell it today you would earn a total of 140.00 from holding Compagnie Financire Richemont or generate 10.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Financire Richemont vs. KERINGUNSPADR 110 EO
Performance |
| Timeline |
| Compagnie Financière |
| KERINGUNSPADR 1/10 |
Compagnie Financière and KERINGUNSPADR 1/10 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Financière and KERINGUNSPADR 1/10
The main advantage of trading using opposite Compagnie Financière and KERINGUNSPADR 1/10 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Financière position performs unexpectedly, KERINGUNSPADR 1/10 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 KERINGUNSPADR 1/10 will offset losses from the drop in KERINGUNSPADR 1/10's long position.| Compagnie Financière vs. SINGAPORE AIRLINES | Compagnie Financière vs. Guidewire Software | Compagnie Financière vs. Magic Software Enterprises | Compagnie Financière vs. United Airlines Holdings |
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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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