Correlation Between Carmat SA and Equitable Holdings

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

By analyzing existing cross correlation between Carmat SA and Equitable Holdings, you can compare the effects of market volatilities on Carmat SA and Equitable Holdings 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 Equitable Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and Equitable Holdings.

Diversification Opportunities for Carmat SA and Equitable Holdings

-0.22

Correlation Coefficient

Carmat SA  Equitable Holdings

Very good diversification

The 3 months correlation between Carmat and Equitable is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Holdings 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 Equitable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Holdings has no effect on the direction of Carmat SA i.e., Carmat SA and Equitable Holdings go up and down completely randomly.

Pair Corralation between Carmat SA and Equitable Holdings

Assuming the 90 days horizon Carmat SA is expected to under-perform the Equitable Holdings. In addition to that, Carmat SA is 2.71 times more volatile than Equitable Holdings. It trades about -0.04 of its total potential returns per unit of risk. Equitable Holdings is currently generating about 0.08 per unit of volatility. If you would invest  4,460  in Equitable Holdings on December 30, 2024 and sell it today you would earn a total of  400.00  from holding Equitable Holdings or generate 8.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Carmat SA  vs.  Equitable Holdings

Carmat SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carmat SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Equitable Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Equitable Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Equitable Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Carmat SA and Equitable Holdings

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

The idea behind Carmat SA and Equitable Holdings 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.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.