Correlation Between Fill Up and Compagnie

Can any of the company-specific risk be diversified away by investing in both Fill Up and Compagnie 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 Fill Up and Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fill Up Media and Compagnie de Chemins, you can compare the effects of market volatilities on Fill Up and Compagnie 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 Fill Up with a short position of Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fill Up and Compagnie.

Diversification Opportunities for Fill Up and Compagnie

0.28

Correlation Coefficient

Fill Up  Compagnie

Modest diversification

The 3 months correlation between Fill and Compagnie is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fill Up Media and Compagnie de Chemins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Chemins and Fill Up 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 Fill Up Media are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Chemins has no effect on the direction of Fill Up i.e., Fill Up and Compagnie go up and down completely randomly.

Pair Corralation between Fill Up and Compagnie

Assuming the 90 days trading horizon Fill Up Media is expected to under-perform the Compagnie. But the stock apears to be less risky and, when comparing its historical volatility, Fill Up Media is 1.22 times less risky than Compagnie. The stock trades about -0.05 of its potential returns per unit of risk. The Compagnie de Chemins is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  69,500  in Compagnie de Chemins on October 5, 2024 and sell it today you would earn a total of  11,500  from holding Compagnie de Chemins or generate 16.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.36%
Values	Daily Returns

Fill Up Media  vs.  Compagnie de Chemins

Fill Up Media

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fill Up Media are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Fill Up reported solid returns over the last few months and may actually be approaching a breakup point.

Compagnie de Chemins

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie de Chemins are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Compagnie may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Fill Up and Compagnie

The main advantage of trading using opposite Fill Up and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fill Up position performs unexpectedly, Compagnie 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 will offset losses from the drop in Compagnie's long position.

The idea behind Fill Up Media and Compagnie de Chemins 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.