Correlation Between Carmat SA and WOLTERS KLUWER

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

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

Diversification Opportunities for Carmat SA and WOLTERS KLUWER

0.8

Correlation Coefficient

Carmat SA  WOLTERS KLUWER

Very poor diversification

The 3 months correlation between Carmat and WOLTERS is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and WOLTERS KLUWER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOLTERS KLUWER ADR 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 WOLTERS KLUWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOLTERS KLUWER ADR has no effect on the direction of Carmat SA i.e., Carmat SA and WOLTERS KLUWER go up and down completely randomly.

Pair Corralation between Carmat SA and WOLTERS KLUWER

Assuming the 90 days horizon Carmat SA is expected to under-perform the WOLTERS KLUWER. In addition to that, Carmat SA is 10.83 times more volatile than WOLTERS KLUWER ADR. It trades about -0.03 of its total potential returns per unit of risk. WOLTERS KLUWER ADR is currently generating about -0.04 per unit of volatility. If you would invest  14,770  in WOLTERS KLUWER ADR on April 22, 2025 and sell it today you would lose (670.00) from holding WOLTERS KLUWER ADR or give up 4.54% of portfolio value over 90 days.

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

Carmat SA  vs.  WOLTERS KLUWER ADR

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.

WOLTERS KLUWER ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days WOLTERS KLUWER ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, WOLTERS KLUWER 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 WOLTERS KLUWER

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

The idea behind Carmat SA and WOLTERS KLUWER ADR 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.