Correlation Between Carmat SA and Range Resources

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

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

Diversification Opportunities for Carmat SA and Range Resources

0.76

Correlation Coefficient

Carmat SA  Range Resources

Poor diversification

The 3 months correlation between Carmat and Range is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and Range Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Range Resources Corp 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 Range Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Range Resources Corp has no effect on the direction of Carmat SA i.e., Carmat SA and Range Resources go up and down completely randomly.

Pair Corralation between Carmat SA and Range Resources

Assuming the 90 days horizon Carmat SA is expected to under-perform the Range Resources. In addition to that, Carmat SA is 14.41 times more volatile than Range Resources Corp. It trades about -0.04 of its total potential returns per unit of risk. Range Resources Corp is currently generating about -0.07 per unit of volatility. If you would invest  6,289  in Range Resources Corp on April 23, 2025 and sell it today you would lose (339.00) from holding Range Resources Corp or give up 5.39% of portfolio value over 90 days.

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

Carmat SA  vs.  Range Resources Corp

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Range Resources Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Range Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Range Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Carmat SA and Range Resources

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

The idea behind Carmat SA and Range Resources Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.