Correlation Between United Internet and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both United Internet 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 United Internet and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Internet AG and Compagnie Plastic Omnium, you can compare the effects of market volatilities on United Internet 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 United Internet with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and Compagnie Plastic.
Diversification Opportunities for United Internet and Compagnie Plastic
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and Compagnie is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG 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 United Internet 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 United Internet AG 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 United Internet i.e., United Internet and Compagnie Plastic go up and down completely randomly.
Pair Corralation between United Internet and Compagnie Plastic
Assuming the 90 days trading horizon United Internet AG is expected to under-perform the Compagnie Plastic. In addition to that, United Internet is 1.52 times more volatile than Compagnie Plastic Omnium. It trades about -0.24 of its total potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.09 per unit of volatility. If you would invest 887.00 in Compagnie Plastic Omnium on September 5, 2024 and sell it today you would lose (42.00) from holding Compagnie Plastic Omnium or give up 4.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Internet AG vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| United Internet AG |
| Compagnie Plastic Omnium |
United Internet and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Internet and Compagnie Plastic
The main advantage of trading using opposite United Internet and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet 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.| United Internet vs. Air New Zealand | United Internet vs. Materialise NV | United Internet vs. FORWARD AIR P | United Internet vs. Fair Isaac Corp |
| Compagnie Plastic vs. PT Astra International | Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings | Compagnie Plastic vs. Origin Agritech |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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