Correlation Between Carpenter Technology and Liquidmetal Technologies
Can any of the company-specific risk be diversified away by investing in both Carpenter Technology and Liquidmetal 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 Carpenter Technology and Liquidmetal Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carpenter Technology and Liquidmetal Technologies, you can compare the effects of market volatilities on Carpenter Technology and Liquidmetal 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 Carpenter Technology with a short position of Liquidmetal Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carpenter Technology and Liquidmetal Technologies.
Diversification Opportunities for Carpenter Technology and Liquidmetal Technologies
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carpenter and Liquidmetal is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Carpenter Technology and Liquidmetal Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liquidmetal Technologies 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 Liquidmetal Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liquidmetal Technologies has no effect on the direction of Carpenter Technology i.e., Carpenter Technology and Liquidmetal Technologies go up and down completely randomly.
Pair Corralation between Carpenter Technology and Liquidmetal Technologies
If you would invest 16,604 in Carpenter Technology on August 28, 2024 and sell it today you would earn a total of 2,905 from holding Carpenter Technology or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Carpenter Technology vs. Liquidmetal Technologies
Performance |
| Timeline |
| Carpenter Technology |
| Liquidmetal Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Carpenter Technology and Liquidmetal Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carpenter Technology and Liquidmetal Technologies
The main advantage of trading using opposite Carpenter Technology and Liquidmetal Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carpenter Technology position performs unexpectedly, Liquidmetal 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 Liquidmetal Technologies will offset losses from the drop in Liquidmetal Technologies' long position.| Carpenter Technology vs. Northwest Pipe | Carpenter Technology vs. Insteel Industries | Carpenter Technology vs. ESAB Corp | Carpenter Technology vs. Gulf Island Fabrication |
| Liquidmetal Technologies vs. Insteel Industries | Liquidmetal Technologies vs. Carpenter Technology | Liquidmetal Technologies vs. Haynes International | Liquidmetal Technologies vs. Mueller Industries |
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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