Correlation Between Burelle SA and Carmila SA
Can any of the company-specific risk be diversified away by investing in both Burelle SA and Carmila 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 Burelle SA and Carmila SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burelle SA and Carmila SA, you can compare the effects of market volatilities on Burelle SA and Carmila 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 Burelle SA with a short position of Carmila SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burelle SA and Carmila SA.
Diversification Opportunities for Burelle SA and Carmila SA
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Burelle and Carmila is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Burelle SA and Carmila SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carmila SA and Burelle 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 Burelle SA are associated (or correlated) with Carmila SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carmila SA has no effect on the direction of Burelle SA i.e., Burelle SA and Carmila SA go up and down completely randomly.
Pair Corralation between Burelle SA and Carmila SA
Assuming the 90 days trading horizon Burelle SA is expected to under-perform the Carmila SA. In addition to that, Burelle SA is 1.75 times more volatile than Carmila SA. It trades about -0.1 of its total potential returns per unit of risk. Carmila SA is currently generating about -0.04 per unit of volatility. If you would invest 1,778 in Carmila SA on September 1, 2024 and sell it today you would lose (128.00) from holding Carmila SA or give up 7.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burelle SA vs. Carmila SA
Performance |
| Timeline |
| Burelle SA |
| Carmila SA |
Burelle SA and Carmila SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burelle SA and Carmila SA
The main advantage of trading using opposite Burelle SA and Carmila SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burelle SA position performs unexpectedly, Carmila 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 Carmila SA will offset losses from the drop in Carmila SA's long position.| Burelle SA vs. Compagnie Generale des | Burelle SA vs. Renault SA | Burelle SA vs. Atos SE | Burelle SA vs. Compagnie de Saint Gobain |
| Carmila SA vs. Mercialys SA | Carmila SA vs. Icade SA | Carmila SA vs. Klepierre SA | Carmila SA vs. Altarea SCA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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