Correlation Between Carmat SA and Hewlett Packard
Can any of the company-specific risk be diversified away by investing in both Carmat SA and Hewlett Packard 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 Carmat SA and Hewlett Packard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and Hewlett Packard Enterprise, you can compare the effects of market volatilities on Carmat SA and Hewlett Packard 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 Carmat SA with a short position of Hewlett Packard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and Hewlett Packard.
Diversification Opportunities for Carmat SA and Hewlett Packard
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carmat and Hewlett is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and Hewlett Packard Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hewlett Packard Ente and Carmat 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 Carmat SA are associated (or correlated) with Hewlett Packard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hewlett Packard Ente has no effect on the direction of Carmat SA i.e., Carmat SA and Hewlett Packard go up and down completely randomly.
Pair Corralation between Carmat SA and Hewlett Packard
Assuming the 90 days horizon Carmat SA is expected to under-perform the Hewlett Packard. In addition to that, Carmat SA is 1.91 times more volatile than Hewlett Packard Enterprise. It trades about -0.12 of its total potential returns per unit of risk. Hewlett Packard Enterprise is currently generating about 0.08 per unit of volatility. If you would invest 1,705 in Hewlett Packard Enterprise on November 2, 2024 and sell it today you would earn a total of 378.00 from holding Hewlett Packard Enterprise or generate 22.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carmat SA vs. Hewlett Packard Enterprise
Performance |
| Timeline |
| Carmat SA |
| Hewlett Packard Ente |
Carmat SA and Hewlett Packard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and Hewlett Packard
The main advantage of trading using opposite Carmat SA and Hewlett Packard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, Hewlett Packard 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 Hewlett Packard will offset losses from the drop in Hewlett Packard's long position.| Carmat SA vs. ESSILORLUXOTTICA 12ON | Carmat SA vs. Becton Dickinson and | Carmat SA vs. HOYA Corporation | Carmat SA vs. Sartorius Stedim Biotech |
| Hewlett Packard vs. Guangdong Investment Limited | Hewlett Packard vs. SEI INVESTMENTS | Hewlett Packard vs. NORWEGIAN AIR SHUT | Hewlett Packard vs. MGIC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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