Correlation Between GOODYEAR T and Carmat SA
Can any of the company-specific risk be diversified away by investing in both GOODYEAR T and Carmat SA 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 GOODYEAR T and Carmat SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOODYEAR T RUBBER and Carmat SA, you can compare the effects of market volatilities on GOODYEAR T and Carmat SA 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 GOODYEAR T with a short position of Carmat SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOODYEAR T and Carmat SA.
Diversification Opportunities for GOODYEAR T and Carmat SA
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GOODYEAR and Carmat is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding GOODYEAR T RUBBER and Carmat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carmat SA and GOODYEAR T 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 GOODYEAR T RUBBER are associated (or correlated) with Carmat SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carmat SA has no effect on the direction of GOODYEAR T i.e., GOODYEAR T and Carmat SA go up and down completely randomly.
Pair Corralation between GOODYEAR T and Carmat SA
Assuming the 90 days trading horizon GOODYEAR T RUBBER is expected to generate 0.7 times more return on investment than Carmat SA. However, GOODYEAR T RUBBER is 1.42 times less risky than Carmat SA. It trades about 0.46 of its potential returns per unit of risk. Carmat SA is currently generating about -0.21 per unit of risk. If you would invest 738.00 in GOODYEAR T RUBBER on September 1, 2024 and sell it today you would earn a total of 276.00 from holding GOODYEAR T RUBBER or generate 37.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
GOODYEAR T RUBBER vs. Carmat SA
Performance |
| Timeline |
| GOODYEAR T RUBBER |
| Carmat SA |
GOODYEAR T and Carmat SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOODYEAR T and Carmat SA
The main advantage of trading using opposite GOODYEAR T and Carmat SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOODYEAR T position performs unexpectedly, Carmat SA 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 Carmat SA will offset losses from the drop in Carmat SA's long position.| GOODYEAR T vs. Pure Storage | GOODYEAR T vs. DICKER DATA LTD | GOODYEAR T vs. PUBLIC STORAGE PRFO | GOODYEAR T vs. INFORMATION SVC GRP |
| Carmat SA vs. National Retail Properties | Carmat SA vs. Sunstone Hotel Investors | Carmat SA vs. CARSALESCOM | Carmat SA vs. FAST RETAIL ADR |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |