Correlation Between Damartex and Cogelec SA
Can any of the company-specific risk be diversified away by investing in both Damartex and Cogelec SA 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 Damartex and Cogelec SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damartex and Cogelec SA, you can compare the effects of market volatilities on Damartex and Cogelec SA 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 Damartex with a short position of Cogelec SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damartex and Cogelec SA.
Diversification Opportunities for Damartex and Cogelec SA
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Damartex and Cogelec is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Damartex and Cogelec SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogelec SA and Damartex 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 Damartex are associated (or correlated) with Cogelec SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogelec SA has no effect on the direction of Damartex i.e., Damartex and Cogelec SA go up and down completely randomly.
Pair Corralation between Damartex and Cogelec SA
Assuming the 90 days trading horizon Damartex is expected to generate 1.8 times less return on investment than Cogelec SA. In addition to that, Damartex is 1.19 times more volatile than Cogelec SA. It trades about 0.1 of its total potential returns per unit of risk. Cogelec SA is currently generating about 0.22 per unit of volatility. If you would invest 1,140 in Cogelec SA on September 23, 2024 and sell it today you would earn a total of 370.00 from holding Cogelec SA or generate 32.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Damartex vs. Cogelec SA
Performance |
Timeline |
Damartex |
Cogelec SA |
Damartex and Cogelec SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Damartex and Cogelec SA
The main advantage of trading using opposite Damartex and Cogelec SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damartex position performs unexpectedly, Cogelec SA 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 Cogelec SA will offset losses from the drop in Cogelec SA's long position.Damartex vs. ATEME SA | Damartex vs. Figeac Aero SA | Damartex vs. Chargeurs SA | Damartex vs. Xilam Animation |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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