Correlation Between Compagnie Des and Bains Mer

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

By analyzing existing cross correlation between Compagnie des Alpes and Bains Mer Monaco, you can compare the effects of market volatilities on Compagnie Des and Bains Mer 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 Des with a short position of Bains Mer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Des and Bains Mer.

Diversification Opportunities for Compagnie Des and Bains Mer

-0.41

Correlation Coefficient

Compagnie Des  Bains Mer

Very good diversification

The 3 months correlation between Compagnie and Bains is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie des Alpes and Bains Mer Monaco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bains Mer Monaco and Compagnie Des 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 des Alpes are associated (or correlated) with Bains Mer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bains Mer Monaco has no effect on the direction of Compagnie Des i.e., Compagnie Des and Bains Mer go up and down completely randomly.

Pair Corralation between Compagnie Des and Bains Mer

Assuming the 90 days trading horizon Compagnie des Alpes is expected to generate 0.56 times more return on investment than Bains Mer. However, Compagnie des Alpes is 1.79 times less risky than Bains Mer. It trades about 0.1 of its potential returns per unit of risk. Bains Mer Monaco is currently generating about -0.01 per unit of risk. If you would invest  1,380  in Compagnie des Alpes on September 5, 2024 and sell it today you would earn a total of  92.00  from holding Compagnie des Alpes or generate 6.67% return on investment over 90 days.

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

Compagnie des Alpes  vs.  Bains Mer Monaco

Compagnie des Alpes

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie des Alpes are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Compagnie Des may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bains Mer Monaco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bains Mer Monaco has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bains Mer 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 Des and Bains Mer

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

The idea behind Compagnie des Alpes and Bains Mer Monaco 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.