Correlation Between Gibraltar Industries and Carrier Global
Can any of the company-specific risk be diversified away by investing in both Gibraltar Industries and Carrier Global 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 Gibraltar Industries and Carrier Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gibraltar Industries and Carrier Global Corp, you can compare the effects of market volatilities on Gibraltar Industries and Carrier Global 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 Gibraltar Industries with a short position of Carrier Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gibraltar Industries and Carrier Global.
Diversification Opportunities for Gibraltar Industries and Carrier Global
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gibraltar and Carrier is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gibraltar Industries and Carrier Global Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrier Global Corp and Gibraltar Industries 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 Gibraltar Industries are associated (or correlated) with Carrier Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrier Global Corp has no effect on the direction of Gibraltar Industries i.e., Gibraltar Industries and Carrier Global go up and down completely randomly.
Pair Corralation between Gibraltar Industries and Carrier Global
Given the investment horizon of 90 days Gibraltar Industries is expected to generate 2.05 times less return on investment than Carrier Global. In addition to that, Gibraltar Industries is 1.14 times more volatile than Carrier Global Corp. It trades about 0.04 of its total potential returns per unit of risk. Carrier Global Corp is currently generating about 0.08 per unit of volatility. If you would invest 4,846 in Carrier Global Corp on August 28, 2024 and sell it today you would earn a total of 3,041 from holding Carrier Global Corp or generate 62.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gibraltar Industries vs. Carrier Global Corp
Performance |
| Timeline |
| Gibraltar Industries |
| Carrier Global Corp |
Gibraltar Industries and Carrier Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gibraltar Industries and Carrier Global
The main advantage of trading using opposite Gibraltar Industries and Carrier Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gibraltar Industries position performs unexpectedly, Carrier Global 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 Carrier Global will offset losses from the drop in Carrier Global's long position.| Gibraltar Industries vs. Trex Company | Gibraltar Industries vs. Travis Perkins PLC | Gibraltar Industries vs. Janus International Group | Gibraltar Industries vs. Interface |
| Carrier Global vs. Johnson Controls International | Carrier Global vs. Lennox International | Carrier Global vs. Masco | Carrier Global vs. Carlisle Companies Incorporated |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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