Correlation Between Compagnie and Judges Scientific

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

By analyzing existing cross correlation between Compagnie de Saint Gobain and Judges Scientific Plc, you can compare the effects of market volatilities on Compagnie and Judges Scientific 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 with a short position of Judges Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Judges Scientific.

Diversification Opportunities for Compagnie and Judges Scientific

0.54

Correlation Coefficient

Compagnie  Judges Scientific

Very weak diversification

The 3 months correlation between Compagnie and Judges is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and Judges Scientific Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Judges Scientific Plc and Compagnie 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 de Saint Gobain are associated (or correlated) with Judges Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Judges Scientific Plc has no effect on the direction of Compagnie i.e., Compagnie and Judges Scientific go up and down completely randomly.

Pair Corralation between Compagnie and Judges Scientific

Assuming the 90 days trading horizon Compagnie is expected to generate 4.35 times less return on investment than Judges Scientific. In addition to that, Compagnie is 1.17 times more volatile than Judges Scientific Plc. It trades about 0.01 of its total potential returns per unit of risk. Judges Scientific Plc is currently generating about 0.05 per unit of volatility. If you would invest  794,415  in Judges Scientific Plc on April 14, 2025 and sell it today you would earn a total of  25,585  from holding Judges Scientific Plc or generate 3.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Compagnie de Saint Gobain  vs.  Judges Scientific Plc

Compagnie de Saint

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie de Saint Gobain are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Compagnie exhibited solid returns over the last few months and may actually be approaching a breakup point.

Judges Scientific Plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Judges Scientific Plc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Judges Scientific exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compagnie and Judges Scientific

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

The idea behind Compagnie de Saint Gobain and Judges Scientific Plc 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.