Correlation Between Compagnie and Volvo AB

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

Diversification Opportunities for Compagnie and Volvo AB

0.27

Correlation Coefficient

Compagnie  Volvo AB

Modest diversification

The 3 months correlation between Compagnie and Volvo is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and Volvo AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volvo AB ser 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 Volvo AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volvo AB ser has no effect on the direction of Compagnie i.e., Compagnie and Volvo AB go up and down completely randomly.

Pair Corralation between Compagnie and Volvo AB

Assuming the 90 days horizon Compagnie de Saint Gobain is expected to under-perform the Volvo AB. But the pink sheet apears to be less risky and, when comparing its historical volatility, Compagnie de Saint Gobain is 1.28 times less risky than Volvo AB. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Volvo AB ser is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,826  in Volvo AB ser on July 16, 2025 and sell it today you would lose (56.00) from holding Volvo AB ser or give up 1.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Compagnie de Saint Gobain  vs.  Volvo AB ser

Compagnie de Saint

Risk-Adjusted Performance

Weakest

Over the last 90 days Compagnie de Saint Gobain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Volvo AB ser

Risk-Adjusted Performance

Weakest

Over the last 90 days Volvo AB ser has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Volvo AB is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Compagnie and Volvo AB

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

The idea behind Compagnie de Saint Gobain and Volvo AB ser 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.