Correlation Between Carson Development and Cool Technologies
Can any of the company-specific risk be diversified away by investing in both Carson Development and Cool Technologies 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 Carson Development and Cool Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carson Development and Cool Technologies, you can compare the effects of market volatilities on Carson Development and Cool Technologies 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 Carson Development with a short position of Cool Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carson Development and Cool Technologies.
Diversification Opportunities for Carson Development and Cool Technologies
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Carson and Cool is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Carson Development and Cool Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Technologies and Carson Development 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 Carson Development are associated (or correlated) with Cool Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Technologies has no effect on the direction of Carson Development i.e., Carson Development and Cool Technologies go up and down completely randomly.
Pair Corralation between Carson Development and Cool Technologies
If you would invest 0.01 in Cool Technologies on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Cool Technologies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Carson Development vs. Cool Technologies
Performance |
| Timeline |
| Carson Development |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cool Technologies |
Carson Development and Cool Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carson Development and Cool Technologies
The main advantage of trading using opposite Carson Development and Cool Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carson Development position performs unexpectedly, Cool Technologies 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 Cool Technologies will offset losses from the drop in Cool Technologies' long position.| Carson Development vs. Eastman Chemical | Carson Development vs. Stepan Company | Carson Development vs. Keurig Dr Pepper | Carson Development vs. Ecolab Inc |
| Cool Technologies vs. DXP Enterprises | Cool Technologies vs. Applied Industrial Technologies | Cool Technologies vs. Ferguson Plc | Cool Technologies vs. Global Industrial Co |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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