Correlation Between Carmat SA and Industrias Penoles
Can any of the company-specific risk be diversified away by investing in both Carmat SA and Industrias Penoles 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 Industrias Penoles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and Industrias Penoles Sab, you can compare the effects of market volatilities on Carmat SA and Industrias Penoles 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 Industrias Penoles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and Industrias Penoles.
Diversification Opportunities for Carmat SA and Industrias Penoles
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carmat and Industrias is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and Industrias Penoles Sab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrias Penoles Sab 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 Industrias Penoles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrias Penoles Sab has no effect on the direction of Carmat SA i.e., Carmat SA and Industrias Penoles go up and down completely randomly.
Pair Corralation between Carmat SA and Industrias Penoles
Assuming the 90 days horizon Carmat SA is expected to under-perform the Industrias Penoles. In addition to that, Carmat SA is 1.12 times more volatile than Industrias Penoles Sab. It trades about -0.18 of its total potential returns per unit of risk. Industrias Penoles Sab is currently generating about -0.08 per unit of volatility. If you would invest 1,380 in Industrias Penoles Sab on August 30, 2024 and sell it today you would lose (120.00) from holding Industrias Penoles Sab or give up 8.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carmat SA vs. Industrias Penoles Sab
Performance |
| Timeline |
| Carmat SA |
| Industrias Penoles Sab |
Carmat SA and Industrias Penoles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and Industrias Penoles
The main advantage of trading using opposite Carmat SA and Industrias Penoles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, Industrias Penoles 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 Industrias Penoles will offset losses from the drop in Industrias Penoles' long position.| Carmat SA vs. G III Apparel Group | Carmat SA vs. New Residential Investment | Carmat SA vs. EAT WELL INVESTMENT | Carmat SA vs. REINET INVESTMENTS SCA |
| Industrias Penoles vs. Boiron SA | Industrias Penoles vs. COLUMBIA SPORTSWEAR | Industrias Penoles vs. NIPPON STEEL SPADR | Industrias Penoles vs. ABO GROUP ENVIRONMENT |
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 Stocks Directory module to find actively traded stocks across global markets.
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