Correlation Between Carmat SA and Globe Trade
Can any of the company-specific risk be diversified away by investing in both Carmat SA and Globe Trade 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 Globe Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and Globe Trade Centre, you can compare the effects of market volatilities on Carmat SA and Globe Trade 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 Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and Globe Trade.
Diversification Opportunities for Carmat SA and Globe Trade
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Carmat and Globe is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and Globe Trade Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Trade Centre 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 Globe Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Trade Centre has no effect on the direction of Carmat SA i.e., Carmat SA and Globe Trade go up and down completely randomly.
Pair Corralation between Carmat SA and Globe Trade
Assuming the 90 days horizon Carmat SA is expected to under-perform the Globe Trade. In addition to that, Carmat SA is 11.3 times more volatile than Globe Trade Centre. It trades about -0.19 of its total potential returns per unit of risk. Globe Trade Centre is currently generating about -0.12 per unit of volatility. If you would invest 105.00 in Globe Trade Centre on August 29, 2024 and sell it today you would lose (4.00) from holding Globe Trade Centre or give up 3.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carmat SA vs. Globe Trade Centre
Performance |
| Timeline |
| Carmat SA |
| Globe Trade Centre |
Carmat SA and Globe Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and Globe Trade
The main advantage of trading using opposite Carmat SA and Globe Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, Globe Trade 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 Globe Trade will offset losses from the drop in Globe Trade's long position.| Carmat SA vs. Rayonier Advanced Materials | Carmat SA vs. GOODYEAR T RUBBER | Carmat SA vs. Compagnie Plastic Omnium | Carmat SA vs. ALTAIR RES INC |
| Globe Trade vs. ANGI Homeservices | Globe Trade vs. Taylor Morrison Home | Globe Trade vs. DFS Furniture PLC | Globe Trade vs. Fast Retailing Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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