Correlation Between Prosafe SE and Carmat SA
Can any of the company-specific risk be diversified away by investing in both Prosafe SE and Carmat SA 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 Prosafe SE and Carmat SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosafe SE and Carmat SA, you can compare the effects of market volatilities on Prosafe SE and Carmat SA 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 Prosafe SE with a short position of Carmat SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosafe SE and Carmat SA.
Diversification Opportunities for Prosafe SE and Carmat SA
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prosafe and Carmat is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE and Carmat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carmat SA and Prosafe SE 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 Prosafe SE are associated (or correlated) with Carmat SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carmat SA has no effect on the direction of Prosafe SE i.e., Prosafe SE and Carmat SA go up and down completely randomly.
Pair Corralation between Prosafe SE and Carmat SA
Assuming the 90 days horizon Prosafe SE is expected to under-perform the Carmat SA. But the stock apears to be less risky and, when comparing its historical volatility, Prosafe SE is 1.83 times less risky than Carmat SA. The stock trades about -0.15 of its potential returns per unit of risk. The Carmat SA is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 775.00 in Carmat SA on August 27, 2024 and sell it today you would lose (670.00) from holding Carmat SA or give up 86.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosafe SE vs. Carmat SA
Performance |
| Timeline |
| Prosafe SE |
| Carmat SA |
Prosafe SE and Carmat SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosafe SE and Carmat SA
The main advantage of trading using opposite Prosafe SE and Carmat SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosafe SE position performs unexpectedly, Carmat SA 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 Carmat SA will offset losses from the drop in Carmat SA's long position.| Prosafe SE vs. Transportadora de Gas | Prosafe SE vs. TITANIUM TRANSPORTGROUP | Prosafe SE vs. REINET INVESTMENTS SCA | Prosafe SE vs. DIVERSIFIED ROYALTY |
| Carmat SA vs. American Eagle Outfitters | Carmat SA vs. Computer And Technologies | Carmat SA vs. VARIOUS EATERIES LS | Carmat SA vs. FANDIFI TECHNOLOGY P |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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