Correlation Between Carlton Investments and American West
Can any of the company-specific risk be diversified away by investing in both Carlton Investments and American West 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 Carlton Investments and American West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlton Investments and American West Metals, you can compare the effects of market volatilities on Carlton Investments and American West 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 Carlton Investments with a short position of American West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlton Investments and American West.
Diversification Opportunities for Carlton Investments and American West
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Carlton and American is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Carlton Investments and American West Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American West Metals and Carlton Investments 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 Carlton Investments are associated (or correlated) with American West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American West Metals has no effect on the direction of Carlton Investments i.e., Carlton Investments and American West go up and down completely randomly.
Pair Corralation between Carlton Investments and American West
Assuming the 90 days trading horizon Carlton Investments is expected to generate 0.33 times more return on investment than American West. However, Carlton Investments is 3.0 times less risky than American West. It trades about 0.23 of its potential returns per unit of risk. American West Metals is currently generating about -0.29 per unit of risk. If you would invest 3,080 in Carlton Investments on November 27, 2024 and sell it today you would earn a total of 170.00 from holding Carlton Investments or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlton Investments vs. American West Metals
Performance |
| Timeline |
| Carlton Investments |
| American West Metals |
Carlton Investments and American West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlton Investments and American West
The main advantage of trading using opposite Carlton Investments and American West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlton Investments position performs unexpectedly, American West 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 American West will offset losses from the drop in American West's long position.| Carlton Investments vs. BKI Investment | Carlton Investments vs. Kkr Credit Income | Carlton Investments vs. MA Financial Group | Carlton Investments vs. Navigator Global Investments |
| American West vs. Computershare | American West vs. High Tech Metals | American West vs. Technology One | American West vs. Hansen Technologies |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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