Correlation Between Ampco Pittsburgh and Carpenter Technology
Can any of the company-specific risk be diversified away by investing in both Ampco Pittsburgh and Carpenter Technology 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 Ampco Pittsburgh and Carpenter Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampco Pittsburgh and Carpenter Technology, you can compare the effects of market volatilities on Ampco Pittsburgh and Carpenter Technology 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 Ampco Pittsburgh with a short position of Carpenter Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampco Pittsburgh and Carpenter Technology.
Diversification Opportunities for Ampco Pittsburgh and Carpenter Technology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ampco and Carpenter is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ampco Pittsburgh and Carpenter Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carpenter Technology and Ampco Pittsburgh 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 Ampco Pittsburgh are associated (or correlated) with Carpenter Technology. 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 Ampco Pittsburgh i.e., Ampco Pittsburgh and Carpenter Technology go up and down completely randomly.
Pair Corralation between Ampco Pittsburgh and Carpenter Technology
Allowing for the 90-day total investment horizon Ampco Pittsburgh is expected to under-perform the Carpenter Technology. In addition to that, Ampco Pittsburgh is 2.19 times more volatile than Carpenter Technology. It trades about 0.0 of its total potential returns per unit of risk. Carpenter Technology is currently generating about 0.15 per unit of volatility. If you would invest 6,991 in Carpenter Technology on August 24, 2024 and sell it today you would earn a total of 11,080 from holding Carpenter Technology or generate 158.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ampco Pittsburgh vs. Carpenter Technology
Performance |
| Timeline |
| Ampco Pittsburgh |
| Carpenter Technology |
Ampco Pittsburgh and Carpenter Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampco Pittsburgh and Carpenter Technology
The main advantage of trading using opposite Ampco Pittsburgh and Carpenter Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampco Pittsburgh position performs unexpectedly, Carpenter Technology 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 Technology will offset losses from the drop in Carpenter Technology's long position.| Ampco Pittsburgh vs. Northwest Pipe | Ampco Pittsburgh vs. Insteel Industries | Ampco Pittsburgh vs. Carpenter Technology | Ampco Pittsburgh vs. ESAB Corp |
| Carpenter Technology vs. Haynes International | Carpenter Technology vs. Worthington Industries | Carpenter Technology vs. Ryerson Holding Corp | Carpenter Technology vs. Mueller Industries |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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