Correlation Between Carlisle Companies and Owens Corning
Can any of the company-specific risk be diversified away by investing in both Carlisle Companies and Owens Corning 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 Owens Corning 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 Owens Corning, you can compare the effects of market volatilities on Carlisle Companies and Owens Corning 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 Owens Corning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlisle Companies and Owens Corning.
Diversification Opportunities for Carlisle Companies and Owens Corning
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carlisle and Owens is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Carlisle Companies Incorporate and Owens Corning in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owens Corning 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 Owens Corning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owens Corning has no effect on the direction of Carlisle Companies i.e., Carlisle Companies and Owens Corning go up and down completely randomly.
Pair Corralation between Carlisle Companies and Owens Corning
Considering the 90-day investment horizon Carlisle Companies Incorporated is expected to under-perform the Owens Corning. In addition to that, Carlisle Companies is 1.62 times more volatile than Owens Corning. It trades about -0.06 of its total potential returns per unit of risk. Owens Corning is currently generating about 0.27 per unit of volatility. If you would invest 18,132 in Owens Corning on August 24, 2024 and sell it today you would earn a total of 1,626 from holding Owens Corning or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlisle Companies Incorporate vs. Owens Corning
Performance |
| Timeline |
| Carlisle Companies |
| Owens Corning |
Carlisle Companies and Owens Corning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlisle Companies and Owens Corning
The main advantage of trading using opposite Carlisle Companies and Owens Corning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlisle Companies position performs unexpectedly, Owens Corning 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 Owens Corning will offset losses from the drop in Owens Corning'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 |
| Owens Corning vs. Trane Technologies plc | Owens Corning vs. Masco | Owens Corning vs. Quanex Building Products | Owens Corning vs. Jeld Wen Holding |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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