Correlation Between Parkson Retail and Compagnie Plastic

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Parkson Retail and Compagnie Plastic 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 Parkson Retail and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parkson Retail Group and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Parkson Retail and Compagnie Plastic 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 Parkson Retail with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parkson Retail and Compagnie Plastic.

Diversification Opportunities for Parkson Retail and Compagnie Plastic

-0.18
  Correlation Coefficient

Good diversification

The 3 months correlation between Parkson and Compagnie is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Parkson Retail Group and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium and Parkson Retail 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 Parkson Retail Group are associated (or correlated) with Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Parkson Retail i.e., Parkson Retail and Compagnie Plastic go up and down completely randomly.

Pair Corralation between Parkson Retail and Compagnie Plastic

Assuming the 90 days trading horizon Parkson Retail is expected to generate 2.59 times less return on investment than Compagnie Plastic. In addition to that, Parkson Retail is 2.14 times more volatile than Compagnie Plastic Omnium. It trades about 0.05 of its total potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about 0.29 per unit of volatility. If you would invest  823.00  in Compagnie Plastic Omnium on April 21, 2025 and sell it today you would earn a total of  387.00  from holding Compagnie Plastic Omnium or generate 47.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Parkson Retail Group  vs.  Compagnie Plastic Omnium

 Performance 
       Timeline  
Parkson Retail Group 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Parkson Retail Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward indicators, Parkson Retail reported solid returns over the last few months and may actually be approaching a breakup point.
Compagnie Plastic Omnium 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Plastic Omnium are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Compagnie Plastic reported solid returns over the last few months and may actually be approaching a breakup point.

Parkson Retail and Compagnie Plastic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Parkson Retail and Compagnie Plastic

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

Other Complementary Tools

My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Volatility Analysis
Get historical volatility and risk analysis based on latest market data