Correlation Between Carmat SA and NIPPON MEAT
Can any of the company-specific risk be diversified away by investing in both Carmat SA and NIPPON MEAT 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 NIPPON MEAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and NIPPON MEAT PACKERS, you can compare the effects of market volatilities on Carmat SA and NIPPON MEAT 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 NIPPON MEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and NIPPON MEAT.
Diversification Opportunities for Carmat SA and NIPPON MEAT
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carmat and NIPPON is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and NIPPON MEAT PACKERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIPPON MEAT PACKERS 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 NIPPON MEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIPPON MEAT PACKERS has no effect on the direction of Carmat SA i.e., Carmat SA and NIPPON MEAT go up and down completely randomly.
Pair Corralation between Carmat SA and NIPPON MEAT
Assuming the 90 days horizon Carmat SA is expected to under-perform the NIPPON MEAT. In addition to that, Carmat SA is 1.68 times more volatile than NIPPON MEAT PACKERS. It trades about -0.26 of its total potential returns per unit of risk. NIPPON MEAT PACKERS is currently generating about 0.01 per unit of volatility. If you would invest 3,100 in NIPPON MEAT PACKERS on August 25, 2024 and sell it today you would earn a total of 0.00 from holding NIPPON MEAT PACKERS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carmat SA vs. NIPPON MEAT PACKERS
Performance |
| Timeline |
| Carmat SA |
| NIPPON MEAT PACKERS |
Carmat SA and NIPPON MEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and NIPPON MEAT
The main advantage of trading using opposite Carmat SA and NIPPON MEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, NIPPON MEAT 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 NIPPON MEAT will offset losses from the drop in NIPPON MEAT's long position.| Carmat SA vs. MI Homes | Carmat SA vs. ELMOS SEMICONDUCTOR | Carmat SA vs. Autohome ADR | Carmat SA vs. UNIVERSAL MUSIC GROUP |
| NIPPON MEAT vs. Selective Insurance Group | NIPPON MEAT vs. CarsalesCom | NIPPON MEAT vs. MCEWEN MINING INC | NIPPON MEAT vs. Singapore Reinsurance |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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