Correlation Between Kaufman Et and Compagnie Industrielle

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

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

Diversification Opportunities for Kaufman Et and Compagnie Industrielle

0.36

Correlation Coefficient

Kaufman Et  Compagnie Industrielle

Weak diversification

The 3 months correlation between Kaufman and Compagnie is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and Compagnie Industrielle et in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Industrielle and Kaufman Et 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 Kaufman Et Broad 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 Kaufman Et i.e., Kaufman Et and Compagnie Industrielle go up and down completely randomly.

Pair Corralation between Kaufman Et and Compagnie Industrielle

If you would invest  6,100  in Compagnie Industrielle et on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Compagnie Industrielle et or generate 0.0% return on investment over 90 days.

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

Kaufman Et Broad  vs.  Compagnie Industrielle et

Kaufman Et Broad

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kaufman Et Broad are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Kaufman Et is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 Kaufman Et and Compagnie Industrielle

The main advantage of trading using opposite Kaufman Et and Compagnie Industrielle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Et 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 Kaufman Et Broad 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.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.