Correlation Between Carmat SA and TFS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Carmat SA and TFS FINANCIAL 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 TFS FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and TFS FINANCIAL, you can compare the effects of market volatilities on Carmat SA and TFS FINANCIAL 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 TFS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and TFS FINANCIAL.
Diversification Opportunities for Carmat SA and TFS FINANCIAL
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carmat and TFS is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS FINANCIAL 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 TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of Carmat SA i.e., Carmat SA and TFS FINANCIAL go up and down completely randomly.
Pair Corralation between Carmat SA and TFS FINANCIAL
Assuming the 90 days horizon Carmat SA is expected to under-perform the TFS FINANCIAL. In addition to that, Carmat SA is 1.88 times more volatile than TFS FINANCIAL. It trades about -0.22 of its total potential returns per unit of risk. TFS FINANCIAL is currently generating about 0.24 per unit of volatility. If you would invest 1,170 in TFS FINANCIAL on September 2, 2024 and sell it today you would earn a total of 160.00 from holding TFS FINANCIAL or generate 13.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carmat SA vs. TFS FINANCIAL
Performance |
| Timeline |
| Carmat SA |
| TFS FINANCIAL |
Carmat SA and TFS FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and TFS FINANCIAL
The main advantage of trading using opposite Carmat SA and TFS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, TFS FINANCIAL 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 TFS FINANCIAL will offset losses from the drop in TFS FINANCIAL's long position.| Carmat SA vs. ESSILORLUXOTTICA 12ON | Carmat SA vs. Intuitive Surgical | Carmat SA vs. EssilorLuxottica Socit anonyme | Carmat SA vs. HOYA Corporation |
| TFS FINANCIAL vs. SIVERS SEMICONDUCTORS AB | TFS FINANCIAL vs. Darden Restaurants | TFS FINANCIAL vs. Reliance Steel Aluminum | TFS FINANCIAL 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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