Correlation Between Compagnie Plastic and Teradata Corp

Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Teradata Corp 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 Teradata Corp 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 Teradata Corp, you can compare the effects of market volatilities on Compagnie Plastic and Teradata Corp 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 Teradata Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Teradata Corp.

Diversification Opportunities for Compagnie Plastic and Teradata Corp

0.65

Correlation Coefficient

Compagnie Plastic  Teradata Corp

Poor diversification

The 3 months correlation between Compagnie and Teradata is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp 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 Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Teradata Corp go up and down completely randomly.

Pair Corralation between Compagnie Plastic and Teradata Corp

Assuming the 90 days trading horizon Compagnie Plastic Omnium is expected to generate 1.51 times more return on investment than Teradata Corp. However, Compagnie Plastic is 1.51 times more volatile than Teradata Corp. It trades about 0.21 of its potential returns per unit of risk. Teradata Corp is currently generating about 0.01 per unit of risk. If you would invest  903.00  in Compagnie Plastic Omnium on April 23, 2025 and sell it today you would earn a total of  313.00  from holding Compagnie Plastic Omnium or generate 34.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	91.94%
Values	Daily Returns

Compagnie Plastic Omnium  vs.  Teradata Corp

Compagnie Plastic Omnium

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Plastic Omnium are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Compagnie Plastic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Teradata Corp

Risk-Adjusted Performance

Modest

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

Pair Trading with Compagnie Plastic and Teradata Corp

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

The idea behind Compagnie Plastic Omnium and Teradata Corp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.