Correlation Between Carmat SA and GELSENWASSER
Can any of the company-specific risk be diversified away by investing in both Carmat SA and GELSENWASSER 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 GELSENWASSER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and GELSENWASSER, you can compare the effects of market volatilities on Carmat SA and GELSENWASSER 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 GELSENWASSER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and GELSENWASSER.
Diversification Opportunities for Carmat SA and GELSENWASSER
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Carmat and GELSENWASSER is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and GELSENWASSER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GELSENWASSER 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 GELSENWASSER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GELSENWASSER has no effect on the direction of Carmat SA i.e., Carmat SA and GELSENWASSER go up and down completely randomly.
Pair Corralation between Carmat SA and GELSENWASSER
Assuming the 90 days horizon Carmat SA is expected to under-perform the GELSENWASSER. In addition to that, Carmat SA is 3.29 times more volatile than GELSENWASSER. It trades about -0.22 of its total potential returns per unit of risk. GELSENWASSER is currently generating about 0.01 per unit of volatility. If you would invest 50,000 in GELSENWASSER on September 2, 2024 and sell it today you would earn a total of 0.00 from holding GELSENWASSER or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carmat SA vs. GELSENWASSER
Performance |
| Timeline |
| Carmat SA |
| GELSENWASSER |
Carmat SA and GELSENWASSER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and GELSENWASSER
The main advantage of trading using opposite Carmat SA and GELSENWASSER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, GELSENWASSER 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 GELSENWASSER will offset losses from the drop in GELSENWASSER's long position.| Carmat SA vs. ESSILORLUXOTTICA 12ON | Carmat SA vs. Intuitive Surgical | Carmat SA vs. EssilorLuxottica Socit anonyme | Carmat SA vs. HOYA Corporation |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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