Correlation Between Cartrade Tech and Honeywell Automation

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Can any of the company-specific risk be diversified away by investing in both Cartrade Tech and Honeywell Automation 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 Cartrade Tech and Honeywell Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cartrade Tech Limited and Honeywell Automation India, you can compare the effects of market volatilities on Cartrade Tech and Honeywell Automation 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 Cartrade Tech with a short position of Honeywell Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cartrade Tech and Honeywell Automation.

Diversification Opportunities for Cartrade Tech and Honeywell Automation

CartradeHoneywellDiversified AwayCartradeHoneywellDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Cartrade and Honeywell is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cartrade Tech Limited and Honeywell Automation India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honeywell Automation and Cartrade Tech 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 Cartrade Tech Limited are associated (or correlated) with Honeywell Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honeywell Automation has no effect on the direction of Cartrade Tech i.e., Cartrade Tech and Honeywell Automation go up and down completely randomly.

Pair Corralation between Cartrade Tech and Honeywell Automation

Assuming the 90 days trading horizon Cartrade Tech Limited is expected to generate 1.65 times more return on investment than Honeywell Automation. However, Cartrade Tech is 1.65 times more volatile than Honeywell Automation India. It trades about 0.09 of its potential returns per unit of risk. Honeywell Automation India is currently generating about 0.0 per unit of risk. If you would invest  76,785  in Cartrade Tech Limited on December 11, 2024 and sell it today you would earn a total of  78,335  from holding Cartrade Tech Limited or generate 102.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cartrade Tech Limited  vs.  Honeywell Automation India

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0510152025
JavaScript chart by amCharts 3.21.15CARTRADE HONAUT
       Timeline  
Cartrade Tech Limited 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Cartrade Tech Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Cartrade Tech is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar1,3001,4001,5001,6001,7001,800
Honeywell Automation 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Honeywell Automation India has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar34,00036,00038,00040,00042,00044,000

Cartrade Tech and Honeywell Automation Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.51-8.62-5.73-2.840.02.945.938.9211.91 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15CARTRADE HONAUT
       Returns  

Pair Trading with Cartrade Tech and Honeywell Automation

The main advantage of trading using opposite Cartrade Tech and Honeywell Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cartrade Tech position performs unexpectedly, Honeywell Automation 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 Honeywell Automation will offset losses from the drop in Honeywell Automation's long position.
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The idea behind Cartrade Tech Limited and Honeywell Automation India pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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