Correlation Between Transgene and Compagnie
Can any of the company-specific risk be diversified away by investing in both Transgene and Compagnie 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 Transgene and Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transgene SA and Compagnie Du Mont Blanc, you can compare the effects of market volatilities on Transgene and Compagnie 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 Transgene with a short position of Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transgene and Compagnie.
Diversification Opportunities for Transgene and Compagnie
Excellent diversification
The 3 months correlation between Transgene and Compagnie is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Transgene SA and Compagnie Du Mont Blanc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Du Mont and Transgene 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 Transgene SA are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Du Mont has no effect on the direction of Transgene i.e., Transgene and Compagnie go up and down completely randomly.
Pair Corralation between Transgene and Compagnie
Assuming the 90 days trading horizon Transgene SA is expected to under-perform the Compagnie. In addition to that, Transgene is 1.33 times more volatile than Compagnie Du Mont Blanc. It trades about -0.51 of its total potential returns per unit of risk. Compagnie Du Mont Blanc is currently generating about 0.09 per unit of volatility. If you would invest 14,000 in Compagnie Du Mont Blanc on September 4, 2024 and sell it today you would earn a total of 400.00 from holding Compagnie Du Mont Blanc or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Transgene SA vs. Compagnie Du Mont Blanc
Performance |
| Timeline |
| Transgene SA |
| Compagnie Du Mont |
Transgene and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transgene and Compagnie
The main advantage of trading using opposite Transgene and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transgene position performs unexpectedly, Compagnie 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 will offset losses from the drop in Compagnie's long position.| Transgene vs. Innate Pharma | Transgene vs. Nanobiotix SA | Transgene vs. Genfit | Transgene vs. AB Science SA |
| Compagnie vs. Trigano SA | Compagnie vs. SA Catana Group | Compagnie vs. Fountaine Pajo | Compagnie vs. Piscines Desjoyaux 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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