Correlation Between NYSE Composite and Carlisle Companies
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Carlisle Companies 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 NYSE Composite and Carlisle Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Carlisle Companies Incorporated, you can compare the effects of market volatilities on NYSE Composite and Carlisle Companies 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 NYSE Composite with a short position of Carlisle Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Carlisle Companies.
Diversification Opportunities for NYSE Composite and Carlisle Companies
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Carlisle is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Carlisle Companies Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlisle Companies and NYSE Composite 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 NYSE Composite are associated (or correlated) with Carlisle Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlisle Companies has no effect on the direction of NYSE Composite i.e., NYSE Composite and Carlisle Companies go up and down completely randomly.
Pair Corralation between NYSE Composite and Carlisle Companies
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.34 times less return on investment than Carlisle Companies. But when comparing it to its historical volatility, NYSE Composite is 2.33 times less risky than Carlisle Companies. It trades about 0.24 of its potential returns per unit of risk. Carlisle Companies Incorporated is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 42,012 in Carlisle Companies Incorporated on August 28, 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Carlisle Companies Incorporate
Performance |
| Timeline |
NYSE Composite and Carlisle Companies Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Carlisle Companies Incorporated
Pair trading matchups for Carlisle Companies
Pair Trading with NYSE Composite and Carlisle Companies
The main advantage of trading using opposite NYSE Composite and Carlisle Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Carlisle Companies 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 Carlisle Companies will offset losses from the drop in Carlisle Companies' long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Carlisle Companies vs. Lennox International | Carlisle Companies vs. Fortune Brands Innovations | Carlisle Companies vs. Trane Technologies plc | Carlisle Companies vs. Johnson Controls International |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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