Correlation Between Compagnie and Blockchain Group
Can any of the company-specific risk be diversified away by investing in both Compagnie and Blockchain Group 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 Blockchain Group 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 Blockchain Group SA, you can compare the effects of market volatilities on Compagnie and Blockchain Group 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 Blockchain Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Blockchain Group.
Diversification Opportunities for Compagnie and Blockchain Group
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compagnie and Blockchain is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and Blockchain Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Group 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 Blockchain Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Group has no effect on the direction of Compagnie i.e., Compagnie and Blockchain Group go up and down completely randomly.
Pair Corralation between Compagnie and Blockchain Group
Assuming the 90 days trading horizon Compagnie is expected to generate 10.14 times less return on investment than Blockchain Group. But when comparing it to its historical volatility, Compagnie de Saint Gobain is 5.46 times less risky than Blockchain Group. It trades about 0.11 of its potential returns per unit of risk. Blockchain Group SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Blockchain Group SA on November 2, 2024 and sell it today you would earn a total of 38.00 from holding Blockchain Group SA or generate 271.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.06% |
| Values | Daily Returns |
Compagnie de Saint Gobain vs. Blockchain Group SA
Performance |
| Timeline |
| Compagnie de Saint |
| Blockchain Group |
Compagnie and Blockchain Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Blockchain Group
The main advantage of trading using opposite Compagnie and Blockchain Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Blockchain Group 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 Blockchain Group will offset losses from the drop in Blockchain Group's long position.| Compagnie vs. Vinci SA | Compagnie vs. Air Liquide SA | Compagnie vs. Compagnie Generale des | Compagnie vs. Bouygues SA |
| Blockchain Group vs. Gaussin | Blockchain Group vs. Drone Volt SA | Blockchain Group vs. Amoeba SA | Blockchain Group vs. Gensight Biologics 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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