Correlation Between Imerys SA and CMG Cleantech
Can any of the company-specific risk be diversified away by investing in both Imerys SA and CMG Cleantech 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 Imerys SA and CMG Cleantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imerys SA and CMG Cleantech SA, you can compare the effects of market volatilities on Imerys SA and CMG Cleantech 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 Imerys SA with a short position of CMG Cleantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imerys SA and CMG Cleantech.
Diversification Opportunities for Imerys SA and CMG Cleantech
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Imerys and CMG is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Imerys SA and CMG Cleantech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMG Cleantech SA and Imerys SA 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 Imerys SA are associated (or correlated) with CMG Cleantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMG Cleantech SA has no effect on the direction of Imerys SA i.e., Imerys SA and CMG Cleantech go up and down completely randomly.
Pair Corralation between Imerys SA and CMG Cleantech
Assuming the 90 days horizon Imerys SA is expected to under-perform the CMG Cleantech. But the stock apears to be less risky and, when comparing its historical volatility, Imerys SA is 1.38 times less risky than CMG Cleantech. The stock trades about -0.24 of its potential returns per unit of risk. The CMG Cleantech SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 119.00 in CMG Cleantech SA on September 25, 2024 and sell it today you would earn a total of 10.00 from holding CMG Cleantech SA or generate 8.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Imerys SA vs. CMG Cleantech SA
Performance |
Timeline |
Imerys SA |
CMG Cleantech SA |
Imerys SA and CMG Cleantech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Imerys SA and CMG Cleantech
The main advantage of trading using opposite Imerys SA and CMG Cleantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imerys SA position performs unexpectedly, CMG Cleantech 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 CMG Cleantech will offset losses from the drop in CMG Cleantech's long position.The idea behind Imerys SA and CMG Cleantech 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.CMG Cleantech vs. Imerys SA | CMG Cleantech vs. Vallourec | CMG Cleantech vs. Derichebourg | CMG Cleantech vs. Soitec SA |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |