Correlation Between MARKET VECTR and Compagnie

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

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

Diversification Opportunities for MARKET VECTR and Compagnie

0.82

Correlation Coefficient

MARKET VECTR  Compagnie

Very poor diversification

The 3 months correlation between MARKET and Compagnie is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding MARKET VECTR RETAIL 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 MARKET VECTR 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 MARKET VECTR RETAIL 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 MARKET VECTR i.e., MARKET VECTR and Compagnie go up and down completely randomly.

Pair Corralation between MARKET VECTR and Compagnie

Assuming the 90 days trading horizon MARKET VECTR RETAIL is expected to generate 0.87 times more return on investment than Compagnie. However, MARKET VECTR RETAIL is 1.14 times less risky than Compagnie. It trades about 0.18 of its potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about 0.05 per unit of risk. If you would invest  20,010  in MARKET VECTR RETAIL on October 9, 2024 and sell it today you would earn a total of  1,915  from holding MARKET VECTR RETAIL or generate 9.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	94.92%
Values	Daily Returns

MARKET VECTR RETAIL  vs.  Compagnie de Saint Gobain

MARKET VECTR RETAIL

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MARKET VECTR RETAIL are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, MARKET VECTR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Compagnie de Saint

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie de Saint Gobain are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, Compagnie is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MARKET VECTR and Compagnie

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

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.