Correlation Between Montana Technologies and Carrier Global
Can any of the company-specific risk be diversified away by investing in both Montana Technologies and Carrier Global 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 Montana Technologies and Carrier Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Montana Technologies and Carrier Global Corp, you can compare the effects of market volatilities on Montana Technologies and Carrier Global 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 Montana Technologies with a short position of Carrier Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Montana Technologies and Carrier Global.
Diversification Opportunities for Montana Technologies and Carrier Global
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Montana and Carrier is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Montana Technologies and Carrier Global Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrier Global Corp and Montana 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 Montana Technologies are associated (or correlated) with Carrier Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrier Global Corp has no effect on the direction of Montana Technologies i.e., Montana Technologies and Carrier Global go up and down completely randomly.
Pair Corralation between Montana Technologies and Carrier Global
Given the investment horizon of 90 days Montana Technologies is expected to generate 2.5 times more return on investment than Carrier Global. However, Montana Technologies is 2.5 times more volatile than Carrier Global Corp. It trades about 0.45 of its potential returns per unit of risk. Carrier Global Corp is currently generating about -0.14 per unit of risk. If you would invest 666.00 in Montana Technologies on September 14, 2024 and sell it today you would earn a total of 216.00 from holding Montana Technologies or generate 32.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Montana Technologies vs. Carrier Global Corp
Performance |
| Timeline |
| Montana Technologies |
| Carrier Global Corp |
Montana Technologies and Carrier Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Montana Technologies and Carrier Global
The main advantage of trading using opposite Montana Technologies and Carrier Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Montana Technologies position performs unexpectedly, Carrier Global 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 Carrier Global will offset losses from the drop in Carrier Global's long position.| Montana Technologies vs. CF Industries Holdings | Montana Technologies vs. Grupo Televisa SAB | Montana Technologies vs. Western Digital | Montana Technologies vs. Pinterest |
| Carrier Global vs. Johnson Controls International | Carrier Global vs. Lennox International | Carrier Global vs. Masco | Carrier Global vs. Carlisle Companies Incorporated |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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