Correlation Between Carbios and Voltalia
Can any of the company-specific risk be diversified away by investing in both Carbios and Voltalia 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 Carbios and Voltalia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carbios and Voltalia SA, you can compare the effects of market volatilities on Carbios and Voltalia 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 Carbios with a short position of Voltalia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carbios and Voltalia.
Diversification Opportunities for Carbios and Voltalia
Poor diversification
The 3 months correlation between Carbios and Voltalia is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Carbios and Voltalia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltalia SA and Carbios 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 Carbios are associated (or correlated) with Voltalia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltalia SA has no effect on the direction of Carbios i.e., Carbios and Voltalia go up and down completely randomly.
Pair Corralation between Carbios and Voltalia
Assuming the 90 days trading horizon Carbios is expected to under-perform the Voltalia. In addition to that, Carbios is 2.11 times more volatile than Voltalia SA. It trades about -0.14 of its total potential returns per unit of risk. Voltalia SA is currently generating about 0.0 per unit of volatility. If you would invest 757.00 in Voltalia SA on November 2, 2024 and sell it today you would lose (47.00) from holding Voltalia SA or give up 6.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.06% |
| Values | Daily Returns |
Carbios vs. Voltalia SA
Performance |
| Timeline |
| Carbios |
| Voltalia SA |
Carbios and Voltalia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carbios and Voltalia
The main advantage of trading using opposite Carbios and Voltalia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carbios position performs unexpectedly, Voltalia 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 Voltalia will offset losses from the drop in Voltalia's long position.| Carbios vs. Moulinvest | Carbios vs. Poujoulat SA | Carbios vs. Delfingen | Carbios vs. Jacquet Metal Service |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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