Correlation Between Metalliance and Compagnie

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

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

Diversification Opportunities for Metalliance and Compagnie

0.0

Correlation Coefficient

Metalliance  Compagnie

Pay attention - limited upside

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

Pair Corralation between Metalliance and Compagnie

If you would invest  9,850  in Compagnie du Cambodge on October 12, 2024 and sell it today you would earn a total of  1,750  from holding Compagnie du Cambodge or generate 17.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Metalliance SA  vs.  Compagnie du Cambodge

Metalliance SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metalliance SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Metalliance is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Compagnie du Cambodge

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie du Cambodge are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Compagnie sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Metalliance and Compagnie

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

The idea behind Metalliance SA and Compagnie du Cambodge 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.