Correlation Between Carmat SA and KEYCORP
Can any of the company-specific risk be diversified away by investing in both Carmat SA and KEYCORP 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 KEYCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and KEYCORP, you can compare the effects of market volatilities on Carmat SA and KEYCORP 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 KEYCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and KEYCORP.
Diversification Opportunities for Carmat SA and KEYCORP
Excellent diversification
The 3 months correlation between Carmat and KEYCORP is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and KEYCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYCORP 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 KEYCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEYCORP has no effect on the direction of Carmat SA i.e., Carmat SA and KEYCORP go up and down completely randomly.
Pair Corralation between Carmat SA and KEYCORP
Assuming the 90 days horizon Carmat SA is expected to under-perform the KEYCORP. In addition to that, Carmat SA is 2.21 times more volatile than KEYCORP. It trades about -0.05 of its total potential returns per unit of risk. KEYCORP is currently generating about 0.03 per unit of volatility. If you would invest 1,449 in KEYCORP on August 28, 2024 and sell it today you would earn a total of 414.00 from holding KEYCORP or generate 28.57% 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. KEYCORP
Performance |
| Timeline |
| Carmat SA |
| KEYCORP |
Carmat SA and KEYCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and KEYCORP
The main advantage of trading using opposite Carmat SA and KEYCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, KEYCORP 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 KEYCORP will offset losses from the drop in KEYCORP's long position.| Carmat SA vs. American Eagle Outfitters | Carmat SA vs. Computer And Technologies | Carmat SA vs. VARIOUS EATERIES LS | Carmat SA vs. FANDIFI TECHNOLOGY P |
| KEYCORP vs. CONAGRA FOODS | KEYCORP vs. Aluminum of | KEYCORP vs. Performance Food Group | KEYCORP vs. United Natural Foods |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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