Correlation Between Coty and Investin Optimal
Can any of the company-specific risk be diversified away by investing in both Coty and Investin Optimal 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 Coty and Investin Optimal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coty Inc and Investin Optimal VerdensIndex, you can compare the effects of market volatilities on Coty and Investin Optimal 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 Coty with a short position of Investin Optimal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coty and Investin Optimal.
Diversification Opportunities for Coty and Investin Optimal
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coty and Investin is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Coty Inc and Investin Optimal VerdensIndex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investin Optimal Ver and Coty 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 Coty Inc are associated (or correlated) with Investin Optimal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investin Optimal Ver has no effect on the direction of Coty i.e., Coty and Investin Optimal go up and down completely randomly.
Pair Corralation between Coty and Investin Optimal
Given the investment horizon of 90 days Coty Inc is expected to under-perform the Investin Optimal. In addition to that, Coty is 6.28 times more volatile than Investin Optimal VerdensIndex. It trades about -0.01 of its total potential returns per unit of risk. Investin Optimal VerdensIndex is currently generating about 0.14 per unit of volatility. If you would invest 18,453 in Investin Optimal VerdensIndex on January 18, 2024 and sell it today you would earn a total of 2,302 from holding Investin Optimal VerdensIndex or generate 12.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.19% |
Values | Daily Returns |
Coty Inc vs. Investin Optimal VerdensIndex
Performance |
Timeline |
Coty Inc |
Investin Optimal Ver |
Coty and Investin Optimal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coty and Investin Optimal
The main advantage of trading using opposite Coty and Investin Optimal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coty position performs unexpectedly, Investin Optimal 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 Investin Optimal will offset losses from the drop in Investin Optimal's long position.Coty vs. Seneca Foods Corp | Coty vs. Central Garden Pet | Coty vs. Central Garden Pet | Coty vs. Lifeway Foods |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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