Correlation Between Compagnie Plastic and Global Net

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

By analyzing existing cross correlation between Compagnie Plastic Omnium and Global Net Lease, you can compare the effects of market volatilities on Compagnie Plastic and Global Net 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 Plastic with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Global Net.

Diversification Opportunities for Compagnie Plastic and Global Net

-0.13

Correlation Coefficient

Compagnie Plastic  Global Net

Good diversification

The 3 months correlation between Compagnie and Global is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and Compagnie Plastic 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 Plastic Omnium are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Global Net go up and down completely randomly.

Pair Corralation between Compagnie Plastic and Global Net

Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to generate 1.49 times more return on investment than Global Net. However, Compagnie Plastic is 1.49 times more volatile than Global Net Lease. It trades about 0.2 of its potential returns per unit of risk. Global Net Lease is currently generating about -0.02 per unit of risk. If you would invest  919.00  in Compagnie Plastic Omnium on April 25, 2025 and sell it today you would earn a total of  317.00  from holding Compagnie Plastic Omnium or generate 34.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Compagnie Plastic Omnium  vs.  Global Net Lease

Compagnie Plastic Omnium

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Plastic Omnium are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Compagnie Plastic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Global Net Lease

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Net Lease has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Global Net is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Compagnie Plastic and Global Net

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

The idea behind Compagnie Plastic Omnium and Global Net Lease 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..