Correlation Between CarsalesCom and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both CarsalesCom 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 CarsalesCom and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and Compagnie Plastic Omnium, you can compare the effects of market volatilities on CarsalesCom 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 CarsalesCom with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of CarsalesCom and Compagnie Plastic.
Diversification Opportunities for CarsalesCom and Compagnie Plastic
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CarsalesCom and Compagnie is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom 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 CarsalesCom 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 CarsalesCom 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 CarsalesCom i.e., CarsalesCom and Compagnie Plastic go up and down completely randomly.
Pair Corralation between CarsalesCom and Compagnie Plastic
Assuming the 90 days horizon CarsalesCom is expected to generate 0.73 times more return on investment than Compagnie Plastic. However, CarsalesCom is 1.36 times less risky than Compagnie Plastic. It trades about 0.22 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about 0.15 per unit of risk. If you would invest 2,220 in CarsalesCom on October 27, 2024 and sell it today you would earn a total of 160.00 from holding CarsalesCom or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarsalesCom vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| CarsalesCom |
| Compagnie Plastic Omnium |
CarsalesCom and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CarsalesCom and Compagnie Plastic
The main advantage of trading using opposite CarsalesCom and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarsalesCom 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.| CarsalesCom vs. Eidesvik Offshore ASA | CarsalesCom vs. Nomad Foods | CarsalesCom vs. CN MODERN DAIRY | CarsalesCom vs. Luckin Coffee |
| Compagnie Plastic vs. Cal Maine Foods | Compagnie Plastic vs. PATTIES FOODS | Compagnie Plastic vs. GURU ORGANIC ENERGY | Compagnie Plastic vs. CN MODERN DAIRY |
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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