Correlation Between Compagnie and Getlink SE
Can any of the company-specific risk be diversified away by investing in both Compagnie and Getlink SE 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 and Getlink SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie de Saint Gobain and Getlink SE, you can compare the effects of market volatilities on Compagnie and Getlink SE 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 with a short position of Getlink SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Getlink SE.
Diversification Opportunities for Compagnie and Getlink SE
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compagnie and Getlink is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and Getlink SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getlink SE and Compagnie 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 de Saint Gobain are associated (or correlated) with Getlink SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getlink SE has no effect on the direction of Compagnie i.e., Compagnie and Getlink SE go up and down completely randomly.
Pair Corralation between Compagnie and Getlink SE
Assuming the 90 days trading horizon Compagnie de Saint Gobain is expected to generate 1.36 times more return on investment than Getlink SE. However, Compagnie is 1.36 times more volatile than Getlink SE. It trades about 0.09 of its potential returns per unit of risk. Getlink SE is currently generating about 0.02 per unit of risk. If you would invest 4,408 in Compagnie de Saint Gobain on September 23, 2024 and sell it today you would earn a total of 4,118 from holding Compagnie de Saint Gobain or generate 93.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Compagnie de Saint Gobain vs. Getlink SE
Performance |
Timeline |
Compagnie de Saint |
Getlink SE |
Compagnie and Getlink SE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Compagnie and Getlink SE
The main advantage of trading using opposite Compagnie and Getlink SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Getlink SE 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 Getlink SE will offset losses from the drop in Getlink SE's long position.Compagnie vs. Vinci SA | Compagnie vs. Air Liquide SA | Compagnie vs. Compagnie Generale des | Compagnie vs. Bouygues SA |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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