Correlation Between DBV Technologies and Carmat
Can any of the company-specific risk be diversified away by investing in both DBV Technologies and Carmat 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 DBV Technologies and Carmat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBV Technologies SA and Carmat, you can compare the effects of market volatilities on DBV Technologies and Carmat 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 DBV Technologies with a short position of Carmat. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBV Technologies and Carmat.
Diversification Opportunities for DBV Technologies and Carmat
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DBV and Carmat is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding DBV Technologies SA and Carmat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carmat and DBV Technologies 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 DBV Technologies SA are associated (or correlated) with Carmat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carmat has no effect on the direction of DBV Technologies i.e., DBV Technologies and Carmat go up and down completely randomly.
Pair Corralation between DBV Technologies and Carmat
Assuming the 90 days trading horizon DBV Technologies SA is expected to generate 1.62 times more return on investment than Carmat. However, DBV Technologies is 1.62 times more volatile than Carmat. It trades about -0.01 of its potential returns per unit of risk. Carmat is currently generating about -0.12 per unit of risk. If you would invest 65.00 in DBV Technologies SA on September 28, 2024 and sell it today you would lose (3.00) from holding DBV Technologies SA or give up 4.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DBV Technologies SA vs. Carmat
Performance |
Timeline |
DBV Technologies |
Carmat |
DBV Technologies and Carmat Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DBV Technologies and Carmat
The main advantage of trading using opposite DBV Technologies and Carmat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBV Technologies position performs unexpectedly, Carmat 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 will offset losses from the drop in Carmat's long position.DBV Technologies vs. Kalray SA | DBV Technologies vs. Biosynex | DBV Technologies vs. Eurobio Scientific SA | DBV Technologies vs. Quantum Genomics SA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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