Correlation Between AbL Diagnostics and Compagnie
Can any of the company-specific risk be diversified away by investing in both AbL Diagnostics 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 AbL Diagnostics and Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AbL Diagnostics SA and Compagnie du Cambodge, you can compare the effects of market volatilities on AbL Diagnostics 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 AbL Diagnostics with a short position of Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of AbL Diagnostics and Compagnie.
Diversification Opportunities for AbL Diagnostics and Compagnie
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between AbL and Compagnie is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding AbL Diagnostics SA and Compagnie du Cambodge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie du Cambodge and AbL Diagnostics 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 AbL Diagnostics SA 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 du Cambodge has no effect on the direction of AbL Diagnostics i.e., AbL Diagnostics and Compagnie go up and down completely randomly.
Pair Corralation between AbL Diagnostics and Compagnie
Assuming the 90 days trading horizon AbL Diagnostics SA is expected to under-perform the Compagnie. But the stock apears to be less risky and, when comparing its historical volatility, AbL Diagnostics SA is 153.27 times less risky than Compagnie. The stock trades about -0.2 of its potential returns per unit of risk. The Compagnie du Cambodge is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 950,000 in Compagnie du Cambodge on September 29, 2024 and sell it today you would lose (938,550) from holding Compagnie du Cambodge or give up 98.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
AbL Diagnostics SA vs. Compagnie du Cambodge
Performance |
Timeline |
AbL Diagnostics SA |
Compagnie du Cambodge |
AbL Diagnostics and Compagnie Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AbL Diagnostics and Compagnie
The main advantage of trading using opposite AbL Diagnostics and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AbL Diagnostics 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.AbL Diagnostics vs. Compagnie du Cambodge | AbL Diagnostics vs. Compagnie de Saint Gobain | AbL Diagnostics vs. Amoeba SA | AbL Diagnostics vs. Vallourec |
Compagnie vs. Compagnie de Saint Gobain | Compagnie vs. Amoeba SA | Compagnie vs. Vallourec | Compagnie vs. Alstom SA |
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.
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