Correlation Between Compagnie Financière and Compagnie

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

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

Diversification Opportunities for Compagnie Financière and Compagnie

0.0

Correlation Coefficient

Compagnie Financière  Compagnie

Pay attention - limited upside

The 3 months correlation between Compagnie and Compagnie is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Financire Richemont and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint and Compagnie Financière 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 Financire Richemont 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 de Saint has no effect on the direction of Compagnie Financière i.e., Compagnie Financière and Compagnie go up and down completely randomly.

Pair Corralation between Compagnie Financière and Compagnie

If you would invest  1,335  in Compagnie Financire Richemont on October 23, 2024 and sell it today you would earn a total of  485.00  from holding Compagnie Financire Richemont or generate 36.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Compagnie Financire Richemont  vs.  Compagnie de Saint Gobain

Compagnie Financière

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Financire Richemont are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Compagnie Financière reported solid returns over the last few months and may actually be approaching a breakup point.

Compagnie de Saint

Risk-Adjusted Performance

0 of 100

Modest

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

Pair Trading with Compagnie Financière and Compagnie

The main advantage of trading using opposite Compagnie Financière and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Financière 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 Compagnie Financire Richemont and Compagnie de Saint Gobain 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.