Correlation Between Carmat SA and OCBC
Can any of the company-specific risk be diversified away by investing in both Carmat SA and OCBC 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 OCBC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and OCBC, you can compare the effects of market volatilities on Carmat SA and OCBC 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 OCBC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and OCBC.
Diversification Opportunities for Carmat SA and OCBC
Pay attention - limited upside
The 3 months correlation between Carmat and OCBC is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and OCBC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCBC 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 OCBC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCBC has no effect on the direction of Carmat SA i.e., Carmat SA and OCBC go up and down completely randomly.
Pair Corralation between Carmat SA and OCBC
Assuming the 90 days horizon Carmat SA is expected to generate 6.36 times less return on investment than OCBC. In addition to that, Carmat SA is 4.12 times more volatile than OCBC. It trades about 0.01 of its total potential returns per unit of risk. OCBC is currently generating about 0.2 per unit of volatility. If you would invest 1,047 in OCBC on August 30, 2024 and sell it today you would earn a total of 110.00 from holding OCBC or generate 10.51% 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. OCBC
Performance |
| Timeline |
| Carmat SA |
| OCBC |
Carmat SA and OCBC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and OCBC
The main advantage of trading using opposite Carmat SA and OCBC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, OCBC 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 OCBC will offset losses from the drop in OCBC'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 |
| OCBC vs. EPSILON HEALTHCARE LTD | OCBC vs. RYU Apparel | OCBC vs. The Hanover Insurance | OCBC vs. Reinsurance Group of |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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