Correlation Between Carpenter Technology and SG Blocks
Can any of the company-specific risk be diversified away by investing in both Carpenter Technology and SG Blocks 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 SG Blocks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carpenter Technology and SG Blocks, you can compare the effects of market volatilities on Carpenter Technology and SG Blocks 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 SG Blocks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carpenter Technology and SG Blocks.
Diversification Opportunities for Carpenter Technology and SG Blocks
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carpenter and SGBX is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Carpenter Technology and SG Blocks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SG Blocks 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 SG Blocks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SG Blocks has no effect on the direction of Carpenter Technology i.e., Carpenter Technology and SG Blocks go up and down completely randomly.
Pair Corralation between Carpenter Technology and SG Blocks
Considering the 90-day investment horizon Carpenter Technology is expected to generate 0.26 times more return on investment than SG Blocks. However, Carpenter Technology is 3.82 times less risky than SG Blocks. It trades about 0.16 of its potential returns per unit of risk. SG Blocks is currently generating about -0.07 per unit of risk. If you would invest 7,022 in Carpenter Technology on August 26, 2024 and sell it today you would earn a total of 12,075 from holding Carpenter Technology or generate 171.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carpenter Technology vs. SG Blocks
Performance |
| Timeline |
| Carpenter Technology |
| SG Blocks |
Carpenter Technology and SG Blocks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carpenter Technology and SG Blocks
The main advantage of trading using opposite Carpenter Technology and SG Blocks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carpenter Technology position performs unexpectedly, SG Blocks 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 SG Blocks will offset losses from the drop in SG Blocks' long position.| Carpenter Technology vs. Haynes International | Carpenter Technology vs. Worthington Industries | Carpenter Technology vs. Ryerson Holding Corp | Carpenter Technology vs. Mueller Industries |
| SG Blocks vs. Dave Warrants | SG Blocks vs. Evolv Technologies Holdings | SG Blocks vs. Aquagold International | SG Blocks vs. Morningstar Unconstrained Allocation |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |