Correlation Between Carsmartt and Meso Numismatics

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

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

Diversification Opportunities for Carsmartt and Meso Numismatics

-0.02

Correlation Coefficient

Carsmartt  Meso Numismatics

Good diversification

The 3 months correlation between Carsmartt and Meso is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Carsmartt and Meso Numismatics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meso Numismatics and Carsmartt 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 Carsmartt are associated (or correlated) with Meso Numismatics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meso Numismatics has no effect on the direction of Carsmartt i.e., Carsmartt and Meso Numismatics go up and down completely randomly.

Pair Corralation between Carsmartt and Meso Numismatics

Given the investment horizon of 90 days Carsmartt is expected to generate 0.95 times more return on investment than Meso Numismatics. However, Carsmartt is 1.06 times less risky than Meso Numismatics. It trades about -0.05 of its potential returns per unit of risk. Meso Numismatics is currently generating about -0.53 per unit of risk. If you would invest  0.17  in Carsmartt on October 23, 2024 and sell it today you would lose (0.03) from holding Carsmartt or give up 17.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.37%
Values	Daily Returns

Carsmartt  vs.  Meso Numismatics

Carsmartt

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Carsmartt are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Carsmartt displayed solid returns over the last few months and may actually be approaching a breakup point.

Meso Numismatics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meso Numismatics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Carsmartt and Meso Numismatics

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

The idea behind Carsmartt and Meso Numismatics 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.