Correlation Between Carmat SA and CHENIERE ENERGY
Can any of the company-specific risk be diversified away by investing in both Carmat SA and CHENIERE ENERGY 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 CHENIERE ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and CHENIERE ENERGY, you can compare the effects of market volatilities on Carmat SA and CHENIERE ENERGY 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 CHENIERE ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and CHENIERE ENERGY.
Diversification Opportunities for Carmat SA and CHENIERE ENERGY
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carmat and CHENIERE is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and CHENIERE ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHENIERE ENERGY 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 CHENIERE ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHENIERE ENERGY has no effect on the direction of Carmat SA i.e., Carmat SA and CHENIERE ENERGY go up and down completely randomly.
Pair Corralation between Carmat SA and CHENIERE ENERGY
Assuming the 90 days horizon Carmat SA is expected to under-perform the CHENIERE ENERGY. In addition to that, Carmat SA is 2.16 times more volatile than CHENIERE ENERGY. It trades about -0.18 of its total potential returns per unit of risk. CHENIERE ENERGY is currently generating about 0.49 per unit of volatility. If you would invest 16,750 in CHENIERE ENERGY on August 30, 2024 and sell it today you would earn a total of 4,260 from holding CHENIERE ENERGY or generate 25.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Carmat SA vs. CHENIERE ENERGY
Performance |
| Timeline |
| Carmat SA |
| CHENIERE ENERGY |
Carmat SA and CHENIERE ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and CHENIERE ENERGY
The main advantage of trading using opposite Carmat SA and CHENIERE ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, CHENIERE ENERGY 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 CHENIERE ENERGY will offset losses from the drop in CHENIERE ENERGY's 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 |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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