Correlation Between Alpha Pro and Carlisle Companies
Can any of the company-specific risk be diversified away by investing in both Alpha Pro and Carlisle Companies 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 Alpha Pro and Carlisle Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Pro Tech and Carlisle Companies Incorporated, you can compare the effects of market volatilities on Alpha Pro and Carlisle Companies 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 Alpha Pro with a short position of Carlisle Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Pro and Carlisle Companies.
Diversification Opportunities for Alpha Pro and Carlisle Companies
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alpha and Carlisle is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Pro Tech and Carlisle Companies Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlisle Companies and Alpha Pro 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 Alpha Pro Tech are associated (or correlated) with Carlisle Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlisle Companies has no effect on the direction of Alpha Pro i.e., Alpha Pro and Carlisle Companies go up and down completely randomly.
Pair Corralation between Alpha Pro and Carlisle Companies
Considering the 90-day investment horizon Alpha Pro Tech is expected to under-perform the Carlisle Companies. In addition to that, Alpha Pro is 1.15 times more volatile than Carlisle Companies Incorporated. It trades about -0.13 of its total potential returns per unit of risk. Carlisle Companies Incorporated is currently generating about 0.26 per unit of volatility. If you would invest 41,800 in Carlisle Companies Incorporated on August 30, 2024 and sell it today you would earn a total of 3,959 from holding Carlisle Companies Incorporated or generate 9.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Pro Tech vs. Carlisle Companies Incorporate
Performance |
| Timeline |
| Alpha Pro Tech |
| Carlisle Companies |
Alpha Pro and Carlisle Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Pro and Carlisle Companies
The main advantage of trading using opposite Alpha Pro and Carlisle Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Pro position performs unexpectedly, Carlisle Companies 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 Carlisle Companies will offset losses from the drop in Carlisle Companies' long position.| Alpha Pro vs. Trex Company | Alpha Pro vs. Quanex Building Products | Alpha Pro vs. Armstrong World Industries | Alpha Pro vs. Gibraltar Industries |
| Carlisle Companies vs. Lennox International | Carlisle Companies vs. Fortune Brands Innovations | Carlisle Companies vs. Trane Technologies plc | Carlisle Companies vs. Johnson Controls International |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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