Correlation Between Aubay Socit and Carbios
Can any of the company-specific risk be diversified away by investing in both Aubay Socit and Carbios 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 Aubay Socit and Carbios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aubay Socit Anonyme and Carbios, you can compare the effects of market volatilities on Aubay Socit and Carbios 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 Aubay Socit with a short position of Carbios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aubay Socit and Carbios.
Diversification Opportunities for Aubay Socit and Carbios
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aubay and Carbios is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Aubay Socit Anonyme and Carbios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbios and Aubay Socit 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 Aubay Socit Anonyme are associated (or correlated) with Carbios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbios has no effect on the direction of Aubay Socit i.e., Aubay Socit and Carbios go up and down completely randomly.
Pair Corralation between Aubay Socit and Carbios
Assuming the 90 days trading horizon Aubay Socit Anonyme is expected to generate 0.52 times more return on investment than Carbios. However, Aubay Socit Anonyme is 1.94 times less risky than Carbios. It trades about 0.0 of its potential returns per unit of risk. Carbios is currently generating about -0.08 per unit of risk. If you would invest 4,553 in Aubay Socit Anonyme on August 30, 2024 and sell it today you would lose (143.00) from holding Aubay Socit Anonyme or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aubay Socit Anonyme vs. Carbios
Performance |
| Timeline |
| Aubay Socit Anonyme |
| Carbios |
Aubay Socit and Carbios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aubay Socit and Carbios
The main advantage of trading using opposite Aubay Socit and Carbios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aubay Socit position performs unexpectedly, Carbios 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 Carbios will offset losses from the drop in Carbios' long position.The idea behind Aubay Socit Anonyme and Carbios 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.
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