Correlation Between Stonebridge Acquisition and Compagnie
Can any of the company-specific risk be diversified away by investing in both Stonebridge Acquisition 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 Stonebridge Acquisition and Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stonebridge Acquisition Corp and Compagnie de Saint Gobain, you can compare the effects of market volatilities on Stonebridge Acquisition 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 Stonebridge Acquisition with a short position of Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stonebridge Acquisition and Compagnie.
Diversification Opportunities for Stonebridge Acquisition and Compagnie
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stonebridge and Compagnie is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Stonebridge Acquisition Corp 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 Stonebridge Acquisition 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 Stonebridge Acquisition Corp 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 Stonebridge Acquisition i.e., Stonebridge Acquisition and Compagnie go up and down completely randomly.
Pair Corralation between Stonebridge Acquisition and Compagnie
If you would invest 1,601 in Compagnie de Saint Gobain on February 28, 2024 and sell it today you would earn a total of 168.00 from holding Compagnie de Saint Gobain or generate 10.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Stonebridge Acquisition Corp vs. Compagnie de Saint Gobain
Performance |
Timeline |
Stonebridge Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Compagnie de Saint |
Stonebridge Acquisition and Compagnie Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stonebridge Acquisition and Compagnie
The main advantage of trading using opposite Stonebridge Acquisition and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stonebridge Acquisition 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 Stonebridge Acquisition Corp 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.Compagnie vs. Trane Technologies plc | Compagnie vs. Carrier GlobalCorp | Compagnie vs. Johnson Controls International | Compagnie vs. Builders FirstSource |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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