Correlation Between Compagnie Industrielle and SPIE SA

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

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

Diversification Opportunities for Compagnie Industrielle and SPIE SA

-0.15

Correlation Coefficient

Compagnie Industrielle  SPIE SA

Good diversification

The 3 months correlation between Compagnie and SPIE is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Industrielle et and SPIE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPIE SA and Compagnie Industrielle 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 Industrielle et are associated (or correlated) with SPIE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPIE SA has no effect on the direction of Compagnie Industrielle i.e., Compagnie Industrielle and SPIE SA go up and down completely randomly.

Pair Corralation between Compagnie Industrielle and SPIE SA

If you would invest  0.00  in SPIE SA on October 20, 2024 and sell it today you would earn a total of  0.00  from holding SPIE SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Compagnie Industrielle et  vs.  SPIE SA

Compagnie Industrielle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compagnie Industrielle et has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Compagnie Industrielle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SPIE SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPIE SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Compagnie Industrielle and SPIE SA

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

The idea behind Compagnie Industrielle et and SPIE SA 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.