Correlation Between Carpenter Technology and Gulf Island
Can any of the company-specific risk be diversified away by investing in both Carpenter Technology and Gulf Island 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 Gulf Island into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carpenter Technology and Gulf Island Fabrication, you can compare the effects of market volatilities on Carpenter Technology and Gulf Island 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 Gulf Island. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carpenter Technology and Gulf Island.
Diversification Opportunities for Carpenter Technology and Gulf Island
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carpenter and Gulf is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Carpenter Technology and Gulf Island Fabrication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Island Fabrication 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 Gulf Island. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Island Fabrication has no effect on the direction of Carpenter Technology i.e., Carpenter Technology and Gulf Island go up and down completely randomly.
Pair Corralation between Carpenter Technology and Gulf Island
Considering the 90-day investment horizon Carpenter Technology is expected to generate 1.78 times less return on investment than Gulf Island. But when comparing it to its historical volatility, Carpenter Technology is 1.26 times less risky than Gulf Island. It trades about 0.2 of its potential returns per unit of risk. Gulf Island Fabrication is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 545.00 in Gulf Island Fabrication on August 23, 2024 and sell it today you would earn a total of 165.00 from holding Gulf Island Fabrication or generate 30.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carpenter Technology vs. Gulf Island Fabrication
Performance |
| Timeline |
| Carpenter Technology |
| Gulf Island Fabrication |
Carpenter Technology and Gulf Island Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carpenter Technology and Gulf Island
The main advantage of trading using opposite Carpenter Technology and Gulf Island positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carpenter Technology position performs unexpectedly, Gulf Island 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 Gulf Island will offset losses from the drop in Gulf Island's long position.| Carpenter Technology vs. Haynes International | Carpenter Technology vs. Worthington Industries | Carpenter Technology vs. Ryerson Holding Corp | Carpenter Technology vs. Mueller Industries |
| Gulf Island vs. Haynes International | Gulf Island vs. Insteel Industries | Gulf Island vs. Mayville Engineering Co | Gulf Island vs. ESAB Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |