Correlation Between Carmila SA and Klepierre
Can any of the company-specific risk be diversified away by investing in both Carmila SA and Klepierre 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 Klepierre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmila SA and Klepierre SA, you can compare the effects of market volatilities on Carmila SA and Klepierre 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 Klepierre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmila SA and Klepierre.
Diversification Opportunities for Carmila SA and Klepierre
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carmila and Klepierre is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Carmila SA and Klepierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klepierre SA 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 Klepierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klepierre SA has no effect on the direction of Carmila SA i.e., Carmila SA and Klepierre go up and down completely randomly.
Pair Corralation between Carmila SA and Klepierre
Assuming the 90 days trading horizon Carmila SA is expected to generate 1.59 times less return on investment than Klepierre. In addition to that, Carmila SA is 1.31 times more volatile than Klepierre SA. It trades about 0.04 of its total potential returns per unit of risk. Klepierre SA is currently generating about 0.08 per unit of volatility. If you would invest 2,082 in Klepierre SA on August 31, 2024 and sell it today you would earn a total of 780.00 from holding Klepierre SA or generate 37.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carmila SA vs. Klepierre SA
Performance |
| Timeline |
| Carmila SA |
| Klepierre SA |
Carmila SA and Klepierre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmila SA and Klepierre
The main advantage of trading using opposite Carmila SA and Klepierre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmila SA position performs unexpectedly, Klepierre 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 Klepierre will offset losses from the drop in Klepierre'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 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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