Correlation Between US Bancorp and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both US Bancorp 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 US Bancorp and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and Compagnie Plastic Omnium, you can compare the effects of market volatilities on US Bancorp 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 US Bancorp with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and Compagnie Plastic.
Diversification Opportunities for US Bancorp and Compagnie Plastic
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between UB5 and Compagnie is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp 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 US Bancorp 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 US Bancorp 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 US Bancorp i.e., US Bancorp and Compagnie Plastic go up and down completely randomly.
Pair Corralation between US Bancorp and Compagnie Plastic
Assuming the 90 days horizon US Bancorp is expected to generate 0.89 times more return on investment than Compagnie Plastic. However, US Bancorp is 1.12 times less risky than Compagnie Plastic. It trades about 0.04 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.01 per unit of risk. If you would invest 3,586 in US Bancorp on September 12, 2024 and sell it today you would earn a total of 1,328 from holding US Bancorp or generate 37.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Bancorp vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| US Bancorp |
| Compagnie Plastic Omnium |
US Bancorp and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and Compagnie Plastic
The main advantage of trading using opposite US Bancorp and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp 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.| US Bancorp vs. Ming Le Sports | US Bancorp vs. Tower Semiconductor | US Bancorp vs. Gaztransport Technigaz SA | US Bancorp vs. Thai Beverage Public |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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