Correlation Between Carlson Investments and Ferro SA
Can any of the company-specific risk be diversified away by investing in both Carlson Investments and Ferro 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 Carlson Investments and Ferro SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlson Investments SA and Ferro SA, you can compare the effects of market volatilities on Carlson Investments and Ferro 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 Carlson Investments with a short position of Ferro SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlson Investments and Ferro SA.
Diversification Opportunities for Carlson Investments and Ferro SA
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carlson and Ferro is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Carlson Investments SA and Ferro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferro SA and Carlson Investments 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 Carlson Investments SA are associated (or correlated) with Ferro SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferro SA has no effect on the direction of Carlson Investments i.e., Carlson Investments and Ferro SA go up and down completely randomly.
Pair Corralation between Carlson Investments and Ferro SA
Assuming the 90 days trading horizon Carlson Investments SA is expected to generate 2.59 times more return on investment than Ferro SA. However, Carlson Investments is 2.59 times more volatile than Ferro SA. It trades about 0.04 of its potential returns per unit of risk. Ferro SA is currently generating about -0.01 per unit of risk. If you would invest 382.00 in Carlson Investments SA on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Carlson Investments SA or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlson Investments SA vs. Ferro SA
Performance |
| Timeline |
| Carlson Investments |
| Ferro SA |
Carlson Investments and Ferro SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlson Investments and Ferro SA
The main advantage of trading using opposite Carlson Investments and Ferro SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlson Investments position performs unexpectedly, Ferro 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 Ferro SA will offset losses from the drop in Ferro SA's long position.| Carlson Investments vs. Centrum Finansowe Banku | Carlson Investments vs. Asseco Business Solutions | Carlson Investments vs. Asseco South Eastern | Carlson Investments vs. HM Inwest SA |
| Ferro SA vs. Medicalg | Ferro SA vs. Carlson Investments SA | Ferro SA vs. Immobile | Ferro SA vs. Road Studio SA |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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