Correlation Between Carpenter Technology and Myers Industries
Can any of the company-specific risk be diversified away by investing in both Carpenter Technology and Myers Industries 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 Myers Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carpenter Technology and Myers Industries, you can compare the effects of market volatilities on Carpenter Technology and Myers Industries 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 Myers Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carpenter Technology and Myers Industries.
Diversification Opportunities for Carpenter Technology and Myers Industries
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Carpenter and Myers is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Carpenter Technology and Myers Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myers Industries 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 Myers Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myers Industries has no effect on the direction of Carpenter Technology i.e., Carpenter Technology and Myers Industries go up and down completely randomly.
Pair Corralation between Carpenter Technology and Myers Industries
Considering the 90-day investment horizon Carpenter Technology is expected to generate 0.9 times more return on investment than Myers Industries. However, Carpenter Technology is 1.11 times less risky than Myers Industries. It trades about 0.08 of its potential returns per unit of risk. Myers Industries is currently generating about 0.04 per unit of risk. If you would invest 17,462 in Carpenter Technology on November 7, 2024 and sell it today you would earn a total of 1,746 from holding Carpenter Technology or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carpenter Technology vs. Myers Industries
Performance |
| Timeline |
| Carpenter Technology |
| Myers Industries |
Carpenter Technology and Myers Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carpenter Technology and Myers Industries
The main advantage of trading using opposite Carpenter Technology and Myers Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carpenter Technology position performs unexpectedly, Myers Industries 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 Myers Industries will offset losses from the drop in Myers Industries' long position.| Carpenter Technology vs. Worthington Industries | Carpenter Technology vs. Ryerson Holding Corp | Carpenter Technology vs. Mueller Industries | Carpenter Technology vs. Allegheny Technologies Incorporated |
| Myers Industries vs. O I Glass | Myers Industries vs. Pactiv Evergreen | Myers Industries vs. Greif Bros | Myers Industries vs. Crown Holdings |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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