Correlation Between Carpenter Technology and BioMark Diagnostics
Can any of the company-specific risk be diversified away by investing in both Carpenter Technology and BioMark Diagnostics 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 Carpenter Technology and BioMark Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carpenter Technology and BioMark Diagnostics, you can compare the effects of market volatilities on Carpenter Technology and BioMark Diagnostics 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 Carpenter Technology with a short position of BioMark Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carpenter Technology and BioMark Diagnostics.
Diversification Opportunities for Carpenter Technology and BioMark Diagnostics
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carpenter and BioMark is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Carpenter Technology and BioMark Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioMark Diagnostics and Carpenter Technology 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 Carpenter Technology are associated (or correlated) with BioMark Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioMark Diagnostics has no effect on the direction of Carpenter Technology i.e., Carpenter Technology and BioMark Diagnostics go up and down completely randomly.
Pair Corralation between Carpenter Technology and BioMark Diagnostics
Considering the 90-day investment horizon Carpenter Technology is expected to generate 1.1 times more return on investment than BioMark Diagnostics. However, Carpenter Technology is 1.1 times more volatile than BioMark Diagnostics. It trades about 0.04 of its potential returns per unit of risk. BioMark Diagnostics is currently generating about 0.01 per unit of risk. If you would invest 17,881 in Carpenter Technology on September 12, 2024 and sell it today you would earn a total of 221.00 from holding Carpenter Technology or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Carpenter Technology vs. BioMark Diagnostics
Performance |
| Timeline |
| Carpenter Technology |
| BioMark Diagnostics |
Carpenter Technology and BioMark Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carpenter Technology and BioMark Diagnostics
The main advantage of trading using opposite Carpenter Technology and BioMark Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carpenter Technology position performs unexpectedly, BioMark Diagnostics 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 BioMark Diagnostics will offset losses from the drop in BioMark Diagnostics' long position.| Carpenter Technology vs. Worthington Industries | Carpenter Technology vs. Ryerson Holding Corp | Carpenter Technology vs. Mueller Industries | Carpenter Technology vs. Allegheny Technologies Incorporated |
| BioMark Diagnostics vs. Neuronetics | BioMark Diagnostics vs. Intelligent Bio Solutions | BioMark Diagnostics vs. Biodesix | BioMark Diagnostics vs. Precipio |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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