Correlation Between Compagnie and Ecomiam SA
Can any of the company-specific risk be diversified away by investing in both Compagnie and Ecomiam SA 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 and Ecomiam SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie de Saint Gobain and Ecomiam SA, you can compare the effects of market volatilities on Compagnie and Ecomiam SA 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 with a short position of Ecomiam SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Ecomiam SA.
Diversification Opportunities for Compagnie and Ecomiam SA
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compagnie and Ecomiam is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and Ecomiam SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecomiam SA and Compagnie 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 de Saint Gobain are associated (or correlated) with Ecomiam SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecomiam SA has no effect on the direction of Compagnie i.e., Compagnie and Ecomiam SA go up and down completely randomly.
Pair Corralation between Compagnie and Ecomiam SA
Assuming the 90 days trading horizon Compagnie de Saint Gobain is expected to generate 0.54 times more return on investment than Ecomiam SA. However, Compagnie de Saint Gobain is 1.85 times less risky than Ecomiam SA. It trades about 0.1 of its potential returns per unit of risk. Ecomiam SA is currently generating about -0.09 per unit of risk. If you would invest 7,908 in Compagnie de Saint Gobain on August 30, 2024 and sell it today you would earn a total of 698.00 from holding Compagnie de Saint Gobain or generate 8.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie de Saint Gobain vs. Ecomiam SA
Performance |
| Timeline |
| Compagnie de Saint |
| Ecomiam SA |
Compagnie and Ecomiam SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Ecomiam SA
The main advantage of trading using opposite Compagnie and Ecomiam SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Ecomiam SA 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 Ecomiam SA will offset losses from the drop in Ecomiam SA's long position.| Compagnie vs. Vinci SA | Compagnie vs. Air Liquide SA | Compagnie vs. Compagnie Generale des | Compagnie vs. Bouygues SA |
| Ecomiam SA vs. Verimatrix | Ecomiam SA vs. Agripower France Sa | Ecomiam SA vs. Nacon Sa | Ecomiam SA vs. Paulic Meunerie Sa |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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