Correlation Between Bombril SA and Colgate Palmolive
Can any of the company-specific risk be diversified away by investing in both Bombril SA and Colgate Palmolive 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 Bombril SA and Colgate Palmolive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bombril SA and Colgate Palmolive, you can compare the effects of market volatilities on Bombril SA and Colgate Palmolive 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 Bombril SA with a short position of Colgate Palmolive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bombril SA and Colgate Palmolive.
Diversification Opportunities for Bombril SA and Colgate Palmolive
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bombril and Colgate is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bombril SA and Colgate Palmolive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colgate Palmolive and Bombril SA 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 Bombril SA are associated (or correlated) with Colgate Palmolive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colgate Palmolive has no effect on the direction of Bombril SA i.e., Bombril SA and Colgate Palmolive go up and down completely randomly.
Pair Corralation between Bombril SA and Colgate Palmolive
Assuming the 90 days trading horizon Bombril SA is expected to under-perform the Colgate Palmolive. In addition to that, Bombril SA is 1.42 times more volatile than Colgate Palmolive. It trades about -0.11 of its total potential returns per unit of risk. Colgate Palmolive is currently generating about -0.14 per unit of volatility. If you would invest 7,167 in Colgate Palmolive on July 20, 2025 and sell it today you would lose (1,083) from holding Colgate Palmolive or give up 15.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bombril SA vs. Colgate Palmolive
Performance |
| Timeline |
| Bombril SA |
| Colgate Palmolive |
Bombril SA and Colgate Palmolive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bombril SA and Colgate Palmolive
The main advantage of trading using opposite Bombril SA and Colgate Palmolive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bombril SA position performs unexpectedly, Colgate Palmolive 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 Colgate Palmolive will offset losses from the drop in Colgate Palmolive's long position.| Bombril SA vs. Coty Inc | Bombril SA vs. Kimberly Clark | Bombril SA vs. Eternit SA | Bombril SA vs. Lupatech SA |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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