Correlation Between Carmat SA and Trimble
Can any of the company-specific risk be diversified away by investing in both Carmat SA and Trimble 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 Trimble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and Trimble, you can compare the effects of market volatilities on Carmat SA and Trimble 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 Trimble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and Trimble.
Diversification Opportunities for Carmat SA and Trimble
Pay attention - limited upside
The 3 months correlation between Carmat and Trimble is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and Trimble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimble 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 Trimble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimble has no effect on the direction of Carmat SA i.e., Carmat SA and Trimble go up and down completely randomly.
Pair Corralation between Carmat SA and Trimble
Assuming the 90 days horizon Carmat SA is expected to generate 4.45 times more return on investment than Trimble. However, Carmat SA is 4.45 times more volatile than Trimble. It trades about 0.14 of its potential returns per unit of risk. Trimble is currently generating about 0.24 per unit of risk. If you would invest 98.00 in Carmat SA on October 20, 2024 and sell it today you would earn a total of 11.00 from holding Carmat SA or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carmat SA vs. Trimble
Performance |
| Timeline |
| Carmat SA |
| Trimble |
Carmat SA and Trimble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and Trimble
The main advantage of trading using opposite Carmat SA and Trimble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, Trimble 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 Trimble will offset losses from the drop in Trimble's long position.| Carmat SA vs. ESSILORLUXOTTICA 12ON | Carmat SA vs. Intuitive Surgical | Carmat SA vs. EssilorLuxottica Socit anonyme | Carmat SA vs. Becton Dickinson and |
| Trimble vs. Keyence | Trimble vs. Keysight Technologies | Trimble vs. Teledyne Technologies Incorporated | Trimble vs. Cognex |
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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