Correlation Between Carmat SA and KAUFMAN ET
Can any of the company-specific risk be diversified away by investing in both Carmat SA and KAUFMAN ET 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 KAUFMAN ET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and KAUFMAN ET BROAD, you can compare the effects of market volatilities on Carmat SA and KAUFMAN ET 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 KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and KAUFMAN ET.
Diversification Opportunities for Carmat SA and KAUFMAN ET
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carmat and KAUFMAN is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD 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 KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of Carmat SA i.e., Carmat SA and KAUFMAN ET go up and down completely randomly.
Pair Corralation between Carmat SA and KAUFMAN ET
Assuming the 90 days horizon Carmat SA is expected to under-perform the KAUFMAN ET. In addition to that, Carmat SA is 3.23 times more volatile than KAUFMAN ET BROAD. It trades about -0.05 of its total potential returns per unit of risk. KAUFMAN ET BROAD is currently generating about 0.05 per unit of volatility. If you would invest 2,271 in KAUFMAN ET BROAD on August 25, 2024 and sell it today you would earn a total of 939.00 from holding KAUFMAN ET BROAD or generate 41.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Carmat SA vs. KAUFMAN ET BROAD
Performance |
| Timeline |
| Carmat SA |
| KAUFMAN ET BROAD |
Carmat SA and KAUFMAN ET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and KAUFMAN ET
The main advantage of trading using opposite Carmat SA and KAUFMAN ET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, KAUFMAN ET 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 KAUFMAN ET will offset losses from the drop in KAUFMAN ET's long position.| Carmat SA vs. MI Homes | Carmat SA vs. ELMOS SEMICONDUCTOR | Carmat SA vs. Autohome ADR | Carmat SA vs. UNIVERSAL MUSIC GROUP |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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