Correlation Between Carpenter Technology and Mayne Pharma
Can any of the company-specific risk be diversified away by investing in both Carpenter Technology and Mayne Pharma 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 Mayne Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carpenter Technology and Mayne Pharma Group, you can compare the effects of market volatilities on Carpenter Technology and Mayne Pharma 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 Mayne Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carpenter Technology and Mayne Pharma.
Diversification Opportunities for Carpenter Technology and Mayne Pharma
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carpenter and Mayne is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Carpenter Technology and Mayne Pharma Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayne Pharma Group 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 Mayne Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayne Pharma Group has no effect on the direction of Carpenter Technology i.e., Carpenter Technology and Mayne Pharma go up and down completely randomly.
Pair Corralation between Carpenter Technology and Mayne Pharma
Considering the 90-day investment horizon Carpenter Technology is expected to under-perform the Mayne Pharma. In addition to that, Carpenter Technology is 1.7 times more volatile than Mayne Pharma Group. It trades about -0.2 of its total potential returns per unit of risk. Mayne Pharma Group is currently generating about -0.17 per unit of volatility. If you would invest 460.00 in Mayne Pharma Group on January 5, 2025 and sell it today you would lose (42.00) from holding Mayne Pharma Group or give up 9.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carpenter Technology vs. Mayne Pharma Group
Performance |
| Timeline |
| Carpenter Technology |
| Mayne Pharma Group |
Carpenter Technology and Mayne Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carpenter Technology and Mayne Pharma
The main advantage of trading using opposite Carpenter Technology and Mayne Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carpenter Technology position performs unexpectedly, Mayne Pharma 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 Mayne Pharma will offset losses from the drop in Mayne Pharma's long position.| Carpenter Technology vs. Worthington Industries | Carpenter Technology vs. Ryerson Holding Corp | Carpenter Technology vs. Mueller Industries | Carpenter Technology vs. Allegheny Technologies Incorporated |
| Mayne Pharma vs. Bristol Myers Squibb | Mayne Pharma vs. AbbVie Inc | Mayne Pharma vs. Merck Company | Mayne Pharma vs. Gilead Sciences |
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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