Correlation Between Compagnie Plastic and AcadeMedia

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Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and AcadeMedia 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 Compagnie Plastic and AcadeMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and AcadeMedia AB, you can compare the effects of market volatilities on Compagnie Plastic and AcadeMedia 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 Compagnie Plastic with a short position of AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and AcadeMedia.

Diversification Opportunities for Compagnie Plastic and AcadeMedia

CompagnieAcadeMediaDiversified AwayCompagnieAcadeMediaDiversified Away100%
0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Compagnie and AcadeMedia is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB and Compagnie Plastic 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 Compagnie Plastic Omnium are associated (or correlated) with AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and AcadeMedia go up and down completely randomly.

Pair Corralation between Compagnie Plastic and AcadeMedia

Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to under-perform the AcadeMedia. In addition to that, Compagnie Plastic is 1.62 times more volatile than AcadeMedia AB. It trades about -0.02 of its total potential returns per unit of risk. AcadeMedia AB is currently generating about 0.07 per unit of volatility. If you would invest  4,655  in AcadeMedia AB on November 26, 2024 and sell it today you would earn a total of  2,900  from holding AcadeMedia AB or generate 62.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.8%
ValuesDaily Returns

Compagnie Plastic Omnium  vs.  AcadeMedia AB

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0102030
JavaScript chart by amCharts 3.21.150NW1 0RHN
       Timeline  
Compagnie Plastic Omnium 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Plastic Omnium are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Compagnie Plastic unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8.599.51010.51111.512
AcadeMedia AB 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in AcadeMedia AB are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, AcadeMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5560657075

Compagnie Plastic and AcadeMedia Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.65-5.73-3.81-1.890.0322.14.216.318.42 0.050.100.15
JavaScript chart by amCharts 3.21.150NW1 0RHN
       Returns  

Pair Trading with Compagnie Plastic and AcadeMedia

The main advantage of trading using opposite Compagnie Plastic and AcadeMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, AcadeMedia 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 AcadeMedia will offset losses from the drop in AcadeMedia's long position.
The idea behind Compagnie Plastic Omnium and AcadeMedia AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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