Correlation Between CoreShares Preference and Compagnie Financire

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

By analyzing existing cross correlation between CoreShares Preference Share and Compagnie Financire Richemont, you can compare the effects of market volatilities on CoreShares Preference and Compagnie Financire 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 CoreShares Preference with a short position of Compagnie Financire. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoreShares Preference and Compagnie Financire.

Diversification Opportunities for CoreShares Preference and Compagnie Financire

0.0

Correlation Coefficient

CoreShares Preference  Compagnie Financire

Pay attention - limited upside

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

Pair Corralation between CoreShares Preference and Compagnie Financire

If you would invest  27,321,100  in Compagnie Financire Richemont on October 10, 2024 and sell it today you would earn a total of  1,922,700  from holding Compagnie Financire Richemont or generate 7.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

CoreShares Preference Share  vs.  Compagnie Financire Richemont

CoreShares Preference

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CoreShares Preference Share has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, CoreShares Preference is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Compagnie Financire

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Financire Richemont are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Compagnie Financire may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CoreShares Preference and Compagnie Financire

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

The idea behind CoreShares Preference Share and Compagnie Financire Richemont 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.