Correlation Between Carmat SA and RCM TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Carmat SA and RCM TECHNOLOGIES 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 RCM TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and RCM TECHNOLOGIES, you can compare the effects of market volatilities on Carmat SA and RCM TECHNOLOGIES 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 RCM TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and RCM TECHNOLOGIES.
Diversification Opportunities for Carmat SA and RCM TECHNOLOGIES
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carmat and RCM is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and RCM TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCM TECHNOLOGIES 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 RCM TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCM TECHNOLOGIES has no effect on the direction of Carmat SA i.e., Carmat SA and RCM TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Carmat SA and RCM TECHNOLOGIES
Assuming the 90 days horizon Carmat SA is expected to under-perform the RCM TECHNOLOGIES. In addition to that, Carmat SA is 1.3 times more volatile than RCM TECHNOLOGIES. It trades about -0.2 of its total potential returns per unit of risk. RCM TECHNOLOGIES is currently generating about 0.13 per unit of volatility. If you would invest 1,960 in RCM TECHNOLOGIES on August 31, 2024 and sell it today you would earn a total of 180.00 from holding RCM TECHNOLOGIES or generate 9.18% 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. RCM TECHNOLOGIES
Performance |
| Timeline |
| Carmat SA |
| RCM TECHNOLOGIES |
Carmat SA and RCM TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and RCM TECHNOLOGIES
The main advantage of trading using opposite Carmat SA and RCM TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, RCM TECHNOLOGIES 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 RCM TECHNOLOGIES will offset losses from the drop in RCM TECHNOLOGIES's long position.| Carmat SA vs. China Communications Services | Carmat SA vs. Vulcan Materials | Carmat SA vs. NEWELL RUBBERMAID | Carmat SA vs. Liberty Broadband |
| RCM TECHNOLOGIES vs. SIVERS SEMICONDUCTORS AB | RCM TECHNOLOGIES vs. Darden Restaurants | RCM TECHNOLOGIES vs. Reliance Steel Aluminum | RCM TECHNOLOGIES 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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