Correlation Between Carlisle Companies and Montana Technologies
Can any of the company-specific risk be diversified away by investing in both Carlisle Companies and Montana 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 Carlisle Companies and Montana Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlisle Companies Incorporated and Montana Technologies, you can compare the effects of market volatilities on Carlisle Companies and Montana 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 Carlisle Companies with a short position of Montana Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlisle Companies and Montana Technologies.
Diversification Opportunities for Carlisle Companies and Montana Technologies
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Carlisle and Montana is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Carlisle Companies Incorporate and Montana Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montana Technologies and Carlisle Companies 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 Carlisle Companies Incorporated are associated (or correlated) with Montana Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montana Technologies has no effect on the direction of Carlisle Companies i.e., Carlisle Companies and Montana Technologies go up and down completely randomly.
Pair Corralation between Carlisle Companies and Montana Technologies
Considering the 90-day investment horizon Carlisle Companies is expected to generate 8.31 times less return on investment than Montana Technologies. But when comparing it to its historical volatility, Carlisle Companies Incorporated is 3.49 times less risky than Montana Technologies. It trades about 0.24 of its potential returns per unit of risk. Montana Technologies is currently generating about 0.57 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Montana Technologies on August 31, 2024 and sell it today you would earn a total of 34.00 from holding Montana Technologies or generate 68.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Carlisle Companies Incorporate vs. Montana Technologies
Performance |
| Timeline |
| Carlisle Companies |
| Montana Technologies |
Carlisle Companies and Montana Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlisle Companies and Montana Technologies
The main advantage of trading using opposite Carlisle Companies and Montana Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlisle Companies position performs unexpectedly, Montana 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 Montana Technologies will offset losses from the drop in Montana Technologies' long position.| Carlisle Companies vs. Lennox International | Carlisle Companies vs. Fortune Brands Innovations | Carlisle Companies vs. Trane Technologies plc | Carlisle Companies vs. Johnson Controls International |
| Montana Technologies vs. Quanex Building Products | Montana Technologies vs. Owens Corning | Montana Technologies vs. Trane Technologies plc | Montana Technologies vs. Fortune Brands Innovations |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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