Correlation Between Compagnie Generale and Tongxin International

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

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

Diversification Opportunities for Compagnie Generale and Tongxin International

0.0

Correlation Coefficient

Compagnie Generale  Tongxin International

Pay attention - limited upside

The 3 months correlation between Compagnie and Tongxin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Generale des and Tongxin International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongxin International and Compagnie Generale 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 Generale des are associated (or correlated) with Tongxin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongxin International has no effect on the direction of Compagnie Generale i.e., Compagnie Generale and Tongxin International go up and down completely randomly.

Pair Corralation between Compagnie Generale and Tongxin International

If you would invest  1,670  in Compagnie Generale des on October 27, 2024 and sell it today you would earn a total of  94.00  from holding Compagnie Generale des or generate 5.63% return on investment over 90 days.

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

Compagnie Generale des  vs.  Tongxin International

Compagnie Generale des

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Generale des are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Compagnie Generale is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tongxin International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tongxin International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Tongxin International is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Compagnie Generale and Tongxin International

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

The idea behind Compagnie Generale des and Tongxin International 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 CEOs Directory module to screen CEOs from public companies around the world.