Correlation Between Carlisle Companies and Masonite International
Can any of the company-specific risk be diversified away by investing in both Carlisle Companies and Masonite International 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 Masonite International 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 Masonite International Corp, you can compare the effects of market volatilities on Carlisle Companies and Masonite International 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 Masonite International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlisle Companies and Masonite International.
Diversification Opportunities for Carlisle Companies and Masonite International
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carlisle and Masonite is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Carlisle Companies Incorporate and Masonite International Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masonite International 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 Masonite International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masonite International has no effect on the direction of Carlisle Companies i.e., Carlisle Companies and Masonite International go up and down completely randomly.
Pair Corralation between Carlisle Companies and Masonite International
If you would invest 42,012 in Carlisle Companies Incorporated on August 27, 2024 and sell it today you would earn a total of 4,956 from holding Carlisle Companies Incorporated or generate 11.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Carlisle Companies Incorporate vs. Masonite International Corp
Performance |
| Timeline |
| Carlisle Companies |
| Masonite International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Carlisle Companies and Masonite International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlisle Companies and Masonite International
The main advantage of trading using opposite Carlisle Companies and Masonite International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlisle Companies position performs unexpectedly, Masonite International 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 Masonite International will offset losses from the drop in Masonite International's 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 |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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