Correlation Between Azek and Carrier Global
Can any of the company-specific risk be diversified away by investing in both Azek 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 Azek and Carrier Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azek Company and Carrier Global Corp, you can compare the effects of market volatilities on Azek 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 Azek with a short position of Carrier Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azek and Carrier Global.
Diversification Opportunities for Azek and Carrier Global
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Azek and Carrier is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Azek Company 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 Azek 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 Azek Company 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 Azek i.e., Azek and Carrier Global go up and down completely randomly.
Pair Corralation between Azek and Carrier Global
Given the investment horizon of 90 days Azek is expected to generate 3.54 times less return on investment than Carrier Global. In addition to that, Azek is 1.19 times more volatile than Carrier Global Corp. It trades about 0.03 of its total potential returns per unit of risk. Carrier Global Corp is currently generating about 0.11 per unit of volatility. If you would invest 5,510 in Carrier Global Corp on August 27, 2024 and sell it today you would earn a total of 2,190 from holding Carrier Global Corp or generate 39.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Azek Company vs. Carrier Global Corp
Performance |
| Timeline |
| Azek Company |
| Carrier Global Corp |
Azek and Carrier Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azek and Carrier Global
The main advantage of trading using opposite Azek and Carrier Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azek 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.| Azek vs. Trex Company | Azek vs. Gibraltar Industries | Azek vs. Travis Perkins PLC | Azek vs. Janus International Group |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |