Correlation Between Compagnie Financière and Compagnie Financire

Can any of the company-specific risk be diversified away by investing in both Compagnie Financière 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 Compagnie Financière and Compagnie Financire 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 Financire Richemont, you can compare the effects of market volatilities on Compagnie Financière 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 Compagnie Financière with a short position of Compagnie Financire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Financière and Compagnie Financire.

Diversification Opportunities for Compagnie Financière and Compagnie Financire

0.97

Correlation Coefficient

Compagnie Financière  Compagnie Financire

Almost no diversification

The 3 months correlation between Compagnie and Compagnie is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Financire Richemont and Compagnie Financire Richemont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Financire 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 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 Compagnie Financière i.e., Compagnie Financière and Compagnie Financire go up and down completely randomly.

Pair Corralation between Compagnie Financière and Compagnie Financire

Assuming the 90 days trading horizon Compagnie Financire Richemont is expected to generate 1.37 times more return on investment than Compagnie Financire. However, Compagnie Financière is 1.37 times more volatile than Compagnie Financire Richemont. It trades about 0.09 of its potential returns per unit of risk. Compagnie Financire Richemont is currently generating about 0.1 per unit of risk. If you would invest  1,480  in Compagnie Financire Richemont on December 26, 2024 and sell it today you would earn a total of  240.00  from holding Compagnie Financire Richemont or generate 16.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Compagnie Financire Richemont  vs.  Compagnie Financire Richemont

Compagnie Financière

Risk-Adjusted Performance

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. Despite nearly uncertain basic indicators, Compagnie Financière reported solid returns over the last few months and may actually be approaching a breakup point.

Compagnie Financire

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Financire Richemont are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Compagnie Financire exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compagnie Financière and Compagnie Financire

The main advantage of trading using opposite Compagnie Financière and Compagnie Financire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Financière 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 Compagnie Financire Richemont 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.