Correlation Between Mediantechn and Compagnie Industrielle

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

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

Diversification Opportunities for Mediantechn and Compagnie Industrielle

-0.5

Correlation Coefficient

Mediantechn  Compagnie Industrielle

Very good diversification

The 3 months correlation between Mediantechn and Compagnie is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mediantechn and Compagnie Industrielle et in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Industrielle and Mediantechn 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 Mediantechn are associated (or correlated) with Compagnie Industrielle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Industrielle has no effect on the direction of Mediantechn i.e., Mediantechn and Compagnie Industrielle go up and down completely randomly.

Pair Corralation between Mediantechn and Compagnie Industrielle

Assuming the 90 days trading horizon Mediantechn is expected to generate 7.55 times less return on investment than Compagnie Industrielle. In addition to that, Mediantechn is 2.57 times more volatile than Compagnie Industrielle et. It trades about 0.01 of its total potential returns per unit of risk. Compagnie Industrielle et is currently generating about 0.17 per unit of volatility. If you would invest  5,050  in Compagnie Industrielle et on September 17, 2024 and sell it today you would earn a total of  1,050  from holding Compagnie Industrielle et or generate 20.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mediantechn  vs.  Compagnie Industrielle et

Mediantechn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mediantechn has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Mediantechn is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Compagnie Industrielle

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Industrielle et are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Compagnie Industrielle sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mediantechn and Compagnie Industrielle

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

The idea behind Mediantechn and Compagnie Industrielle et 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.