Correlation Between SIKA AG and Carbios
Can any of the company-specific risk be diversified away by investing in both SIKA AG and Carbios 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 SIKA AG and Carbios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIKA AG UNSPADR and Carbios, you can compare the effects of market volatilities on SIKA AG and Carbios 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 SIKA AG with a short position of Carbios. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIKA AG and Carbios.
Diversification Opportunities for SIKA AG and Carbios
Very poor diversification
The 3 months correlation between SIKA and Carbios is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SIKA AG UNSPADR and Carbios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbios and SIKA AG 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 SIKA AG UNSPADR are associated (or correlated) with Carbios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbios has no effect on the direction of SIKA AG i.e., SIKA AG and Carbios go up and down completely randomly.
Pair Corralation between SIKA AG and Carbios
Assuming the 90 days trading horizon SIKA AG UNSPADR is expected to generate 0.49 times more return on investment than Carbios. However, SIKA AG UNSPADR is 2.03 times less risky than Carbios. It trades about 0.03 of its potential returns per unit of risk. Carbios is currently generating about -0.06 per unit of risk. If you would invest 2,121 in SIKA AG UNSPADR on September 13, 2024 and sell it today you would earn a total of 339.00 from holding SIKA AG UNSPADR or generate 15.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
SIKA AG UNSPADR vs. Carbios
Performance |
| Timeline |
| SIKA AG UNSPADR |
| Carbios |
SIKA AG and Carbios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIKA AG and Carbios
The main advantage of trading using opposite SIKA AG and Carbios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIKA AG position performs unexpectedly, Carbios 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 Carbios will offset losses from the drop in Carbios' long position.| SIKA AG vs. PKSHA TECHNOLOGY INC | SIKA AG vs. CompuGroup Medical SE | SIKA AG vs. Corporate Office Properties | SIKA AG vs. SCANDMEDICAL SOLDK 040 |
| Carbios vs. Geely Automobile Holdings | Carbios vs. National Beverage Corp | Carbios vs. Motorcar Parts of | Carbios vs. Lery Seafood Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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