Correlation Between INFORMATION SVC and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both INFORMATION SVC 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 INFORMATION SVC and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INFORMATION SVC GRP and Compagnie Plastic Omnium, you can compare the effects of market volatilities on INFORMATION SVC 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 INFORMATION SVC with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFORMATION SVC and Compagnie Plastic.
Diversification Opportunities for INFORMATION SVC and Compagnie Plastic
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between INFORMATION and Compagnie is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding INFORMATION SVC GRP 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 INFORMATION SVC 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 INFORMATION SVC GRP 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 INFORMATION SVC i.e., INFORMATION SVC and Compagnie Plastic go up and down completely randomly.
Pair Corralation between INFORMATION SVC and Compagnie Plastic
Assuming the 90 days horizon INFORMATION SVC GRP is expected to under-perform the Compagnie Plastic. But the stock apears to be less risky and, when comparing its historical volatility, INFORMATION SVC GRP is 1.11 times less risky than Compagnie Plastic. The stock trades about -0.02 of its potential returns per unit of risk. The Compagnie Plastic Omnium is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,541 in Compagnie Plastic Omnium on October 29, 2024 and sell it today you would lose (473.00) from holding Compagnie Plastic Omnium or give up 30.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFORMATION SVC GRP vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| INFORMATION SVC GRP |
| Compagnie Plastic Omnium |
INFORMATION SVC and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFORMATION SVC and Compagnie Plastic
The main advantage of trading using opposite INFORMATION SVC and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFORMATION SVC 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.| INFORMATION SVC vs. alstria office REIT AG | INFORMATION SVC vs. VELA TECHNOLPLC LS 0001 | INFORMATION SVC vs. CITY OFFICE REIT | INFORMATION SVC vs. SOFI TECHNOLOGIES |
| Compagnie Plastic vs. BROADWIND ENRGY | Compagnie Plastic vs. GALENA MINING LTD | Compagnie Plastic vs. Television Broadcasts Limited | Compagnie Plastic vs. TRAINLINE PLC LS |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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