Correlation Between Compagnie Plastic and Bilibili

Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Bilibili 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 Bilibili 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 Bilibili, you can compare the effects of market volatilities on Compagnie Plastic and Bilibili 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 Bilibili. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Bilibili.

Diversification Opportunities for Compagnie Plastic and Bilibili

-0.08

Correlation Coefficient

Compagnie Plastic  Bilibili

Good diversification

The 3 months correlation between Compagnie and Bilibili is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili 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 Bilibili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilibili has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Bilibili go up and down completely randomly.

Pair Corralation between Compagnie Plastic and Bilibili

Assuming the 90 days horizon Compagnie Plastic Omnium is expected to under-perform the Bilibili. But the stock apears to be less risky and, when comparing its historical volatility, Compagnie Plastic Omnium is 1.99 times less risky than Bilibili. The stock trades about 0.0 of its potential returns per unit of risk. The Bilibili is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  982.00  in Bilibili on October 7, 2024 and sell it today you would earn a total of  668.00  from holding Bilibili or generate 68.02% return on investment over 90 days.

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

Compagnie Plastic Omnium  vs.  Bilibili

Compagnie Plastic Omnium

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Plastic Omnium are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Compagnie Plastic reported solid returns over the last few months and may actually be approaching a breakup point.

Bilibili

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bilibili has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Compagnie Plastic and Bilibili

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

The idea behind Compagnie Plastic Omnium and Bilibili 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.