Correlation Between Compagnie Gnrale and Commercial Vehicle

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

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

Diversification Opportunities for Compagnie Gnrale and Commercial Vehicle

0.8

Correlation Coefficient

Compagnie Gnrale  Commercial Vehicle

Very poor diversification

The 3 months correlation between Compagnie and Commercial is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Gnrale des and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle and Compagnie Gnrale 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 Gnrale des are associated (or correlated) with Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of Compagnie Gnrale i.e., Compagnie Gnrale and Commercial Vehicle go up and down completely randomly.

Pair Corralation between Compagnie Gnrale and Commercial Vehicle

Assuming the 90 days horizon Compagnie Gnrale des is expected to generate 0.93 times more return on investment than Commercial Vehicle. However, Compagnie Gnrale des is 1.07 times less risky than Commercial Vehicle. It trades about -0.03 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.08 per unit of risk. If you would invest  3,858  in Compagnie Gnrale des on September 14, 2024 and sell it today you would lose (463.00) from holding Compagnie Gnrale des or give up 12.0% of portfolio value over 90 days.

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

Compagnie Gnrale des  vs.  Commercial Vehicle Group

Compagnie Gnrale des

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compagnie Gnrale des has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Commercial Vehicle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commercial Vehicle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Compagnie Gnrale and Commercial Vehicle

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

The idea behind Compagnie Gnrale des and Commercial Vehicle Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.