Correlation Between Aramis Group and Cars

Can any of the company-specific risk be diversified away by investing in both Aramis Group and Cars 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 Aramis Group and Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aramis Group SAS and Cars Inc, you can compare the effects of market volatilities on Aramis Group and Cars 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 Aramis Group with a short position of Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aramis Group and Cars.

Diversification Opportunities for Aramis Group and Cars

0.03

Correlation Coefficient

Aramis Group  Cars

Significant diversification

The 3 months correlation between Aramis and Cars is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Aramis Group SAS and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc and Aramis Group 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 Aramis Group SAS are associated (or correlated) with Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Aramis Group i.e., Aramis Group and Cars go up and down completely randomly.

Pair Corralation between Aramis Group and Cars

Assuming the 90 days trading horizon Aramis Group SAS is expected to generate 0.45 times more return on investment than Cars. However, Aramis Group SAS is 2.22 times less risky than Cars. It trades about -0.01 of its potential returns per unit of risk. Cars Inc is currently generating about -0.22 per unit of risk. If you would invest  813.00  in Aramis Group SAS on December 30, 2024 and sell it today you would lose (19.00) from holding Aramis Group SAS or give up 2.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	58.46%
Values	Daily Returns

Aramis Group SAS  vs.  Cars Inc

Aramis Group SAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aramis Group SAS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aramis Group is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Cars Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cars Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Aramis Group and Cars

The main advantage of trading using opposite Aramis Group and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aramis Group position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.

The idea behind Aramis Group SAS and Cars Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.