Correlation Between American Funds and CARPENTER
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By analyzing existing cross correlation between American Funds 2050 and CARPENTER TECHNOLOGY P, you can compare the effects of market volatilities on American Funds and CARPENTER 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 American Funds with a short position of CARPENTER. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and CARPENTER.
Diversification Opportunities for American Funds and CARPENTER
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and CARPENTER is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2050 and CARPENTER TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARPENTER TECHNOLOGY and American Funds 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 American Funds 2050 are associated (or correlated) with CARPENTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARPENTER TECHNOLOGY has no effect on the direction of American Funds i.e., American Funds and CARPENTER go up and down completely randomly.
Pair Corralation between American Funds and CARPENTER
Assuming the 90 days horizon American Funds 2050 is expected to generate 1.55 times more return on investment than CARPENTER. However, American Funds is 1.55 times more volatile than CARPENTER TECHNOLOGY P. It trades about 0.14 of its potential returns per unit of risk. CARPENTER TECHNOLOGY P is currently generating about -0.01 per unit of risk. If you would invest 2,181 in American Funds 2050 on September 13, 2024 and sell it today you would earn a total of 30.00 from holding American Funds 2050 or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2050 vs. CARPENTER TECHNOLOGY P
Performance |
| Timeline |
| American Funds 2050 |
| CARPENTER TECHNOLOGY |
American Funds and CARPENTER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and CARPENTER
The main advantage of trading using opposite American Funds and CARPENTER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, CARPENTER 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 CARPENTER will offset losses from the drop in CARPENTER's long position.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| CARPENTER vs. HUTCHMED DRC | CARPENTER vs. The Coca Cola | CARPENTER vs. Amgen Inc | CARPENTER vs. enVVeno Medical Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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