Correlation Between Compagnie and Caisse Rgionale

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

By analyzing existing cross correlation between Compagnie du Cambodge and Caisse rgionale de, you can compare the effects of market volatilities on Compagnie and Caisse Rgionale 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 Caisse Rgionale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Caisse Rgionale.

Diversification Opportunities for Compagnie and Caisse Rgionale

-0.33

Correlation Coefficient

Compagnie  Caisse Rgionale

Very good diversification

The 3 months correlation between Compagnie and Caisse is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie du Cambodge and Caisse rgionale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caisse rgionale de 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 du Cambodge are associated (or correlated) with Caisse Rgionale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caisse rgionale de has no effect on the direction of Compagnie i.e., Compagnie and Caisse Rgionale go up and down completely randomly.

Pair Corralation between Compagnie and Caisse Rgionale

Assuming the 90 days trading horizon Compagnie du Cambodge is expected to generate 229.19 times more return on investment than Caisse Rgionale. However, Compagnie is 229.19 times more volatile than Caisse rgionale de. It trades about 0.33 of its potential returns per unit of risk. Caisse rgionale de is currently generating about 0.05 per unit of risk. If you would invest  765,000  in Compagnie du Cambodge on September 3, 2024 and sell it today you would lose (755,500) from holding Compagnie du Cambodge or give up 98.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Compagnie du Cambodge  vs.  Caisse rgionale de

Compagnie du Cambodge

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie du Cambodge are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Compagnie sustained solid returns over the last few months and may actually be approaching a breakup point.

Caisse rgionale de

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Caisse rgionale de are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Caisse Rgionale is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Compagnie and Caisse Rgionale

The main advantage of trading using opposite Compagnie and Caisse Rgionale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Caisse Rgionale 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 Caisse Rgionale will offset losses from the drop in Caisse Rgionale's long position.

The idea behind Compagnie du Cambodge and Caisse rgionale de 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.