Correlation Between Engie SA and CARSALESCOM
Can any of the company-specific risk be diversified away by investing in both Engie SA and CARSALESCOM 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 Engie SA and CARSALESCOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Engie SA and CARSALESCOM, you can compare the effects of market volatilities on Engie SA and CARSALESCOM 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 Engie SA with a short position of CARSALESCOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Engie SA and CARSALESCOM.
Diversification Opportunities for Engie SA and CARSALESCOM
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Engie and CARSALESCOM is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Engie SA and CARSALESCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARSALESCOM and Engie SA 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 Engie SA are associated (or correlated) with CARSALESCOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARSALESCOM has no effect on the direction of Engie SA i.e., Engie SA and CARSALESCOM go up and down completely randomly.
Pair Corralation between Engie SA and CARSALESCOM
Assuming the 90 days horizon Engie SA is expected to generate 1.37 times less return on investment than CARSALESCOM. But when comparing it to its historical volatility, Engie SA is 1.38 times less risky than CARSALESCOM. It trades about 0.07 of its potential returns per unit of risk. CARSALESCOM is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,384 in CARSALESCOM on October 6, 2024 and sell it today you would earn a total of 816.00 from holding CARSALESCOM or generate 58.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.79% |
Values | Daily Returns |
Engie SA vs. CARSALESCOM
Performance |
Timeline |
Engie SA |
CARSALESCOM |
Engie SA and CARSALESCOM Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Engie SA and CARSALESCOM
The main advantage of trading using opposite Engie SA and CARSALESCOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Engie SA position performs unexpectedly, CARSALESCOM 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 CARSALESCOM will offset losses from the drop in CARSALESCOM's long position.Engie SA vs. De Grey Mining | Engie SA vs. Vishay Intertechnology | Engie SA vs. Cognizant Technology Solutions | Engie SA vs. Easy Software AG |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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