Correlation Between Carmila SA and Altarea SCA
Can any of the company-specific risk be diversified away by investing in both Carmila SA and Altarea SCA 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 Carmila SA and Altarea SCA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmila SA and Altarea SCA, you can compare the effects of market volatilities on Carmila SA and Altarea SCA 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 Carmila SA with a short position of Altarea SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmila SA and Altarea SCA.
Diversification Opportunities for Carmila SA and Altarea SCA
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Carmila and Altarea is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Carmila SA and Altarea SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altarea SCA and Carmila 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 Carmila SA are associated (or correlated) with Altarea SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altarea SCA has no effect on the direction of Carmila SA i.e., Carmila SA and Altarea SCA go up and down completely randomly.
Pair Corralation between Carmila SA and Altarea SCA
Assuming the 90 days trading horizon Carmila SA is expected to under-perform the Altarea SCA. But the stock apears to be less risky and, when comparing its historical volatility, Carmila SA is 1.73 times less risky than Altarea SCA. The stock trades about -0.05 of its potential returns per unit of risk. The Altarea SCA is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 10,460 in Altarea SCA on September 2, 2024 and sell it today you would lose (820.00) from holding Altarea SCA or give up 7.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carmila SA vs. Altarea SCA
Performance |
| Timeline |
| Carmila SA |
| Altarea SCA |
Carmila SA and Altarea SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmila SA and Altarea SCA
The main advantage of trading using opposite Carmila SA and Altarea SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmila SA position performs unexpectedly, Altarea SCA 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 Altarea SCA will offset losses from the drop in Altarea SCA's long position.| Carmila SA vs. Altarea SCA | Carmila SA vs. Manitou BF SA | Carmila SA vs. Ossiam Minimum Variance | Carmila SA vs. Granite 3x LVMH |
| Altarea SCA vs. Icade SA | Altarea SCA vs. Covivio SA | Altarea SCA vs. Mercialys SA | Altarea SCA vs. Gecina 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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