Correlation Between Carmat SA and EHEALTH
Can any of the company-specific risk be diversified away by investing in both Carmat SA and EHEALTH 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 EHEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and EHEALTH, you can compare the effects of market volatilities on Carmat SA and EHEALTH 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 EHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and EHEALTH.
Diversification Opportunities for Carmat SA and EHEALTH
Pay attention - limited upside
The 3 months correlation between Carmat and EHEALTH is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and EHEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHEALTH 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 EHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHEALTH has no effect on the direction of Carmat SA i.e., Carmat SA and EHEALTH go up and down completely randomly.
Pair Corralation between Carmat SA and EHEALTH
Assuming the 90 days horizon Carmat SA is expected to under-perform the EHEALTH. In addition to that, Carmat SA is 1.06 times more volatile than EHEALTH. It trades about -0.2 of its total potential returns per unit of risk. EHEALTH is currently generating about 0.22 per unit of volatility. If you would invest 456.00 in EHEALTH on August 31, 2024 and sell it today you would earn a total of 99.00 from holding EHEALTH or generate 21.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Carmat SA vs. EHEALTH
Performance |
| Timeline |
| Carmat SA |
| EHEALTH |
Carmat SA and EHEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and EHEALTH
The main advantage of trading using opposite Carmat SA and EHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, EHEALTH 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 EHEALTH will offset losses from the drop in EHEALTH's long position.| Carmat SA vs. China Communications Services | Carmat SA vs. Vulcan Materials | Carmat SA vs. NEWELL RUBBERMAID | Carmat SA vs. Liberty Broadband |
| EHEALTH vs. SIVERS SEMICONDUCTORS AB | EHEALTH vs. Darden Restaurants | EHEALTH vs. Reliance Steel Aluminum | EHEALTH vs. Q2M Managementberatung AG |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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