Correlation Between SIEM OFFSHORE and Carpenter Technology
Can any of the company-specific risk be diversified away by investing in both SIEM OFFSHORE and Carpenter Technology 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 SIEM OFFSHORE and Carpenter Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIEM OFFSHORE NEW and Carpenter Technology, you can compare the effects of market volatilities on SIEM OFFSHORE and Carpenter Technology 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 SIEM OFFSHORE with a short position of Carpenter Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEM OFFSHORE and Carpenter Technology.
Diversification Opportunities for SIEM OFFSHORE and Carpenter Technology
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between SIEM and Carpenter is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SIEM OFFSHORE NEW and Carpenter Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carpenter Technology and SIEM OFFSHORE 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 SIEM OFFSHORE NEW are associated (or correlated) with Carpenter Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carpenter Technology has no effect on the direction of SIEM OFFSHORE i.e., SIEM OFFSHORE and Carpenter Technology go up and down completely randomly.
Pair Corralation between SIEM OFFSHORE and Carpenter Technology
Assuming the 90 days trading horizon SIEM OFFSHORE is expected to generate 2.34 times less return on investment than Carpenter Technology. But when comparing it to its historical volatility, SIEM OFFSHORE NEW is 1.23 times less risky than Carpenter Technology. It trades about 0.18 of its potential returns per unit of risk. Carpenter Technology is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 14,300 in Carpenter Technology on September 3, 2024 and sell it today you would earn a total of 4,000 from holding Carpenter Technology or generate 27.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIEM OFFSHORE NEW vs. Carpenter Technology
Performance |
| Timeline |
| SIEM OFFSHORE NEW |
| Carpenter Technology |
SIEM OFFSHORE and Carpenter Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIEM OFFSHORE and Carpenter Technology
The main advantage of trading using opposite SIEM OFFSHORE and Carpenter Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEM OFFSHORE position performs unexpectedly, Carpenter Technology 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 Carpenter Technology will offset losses from the drop in Carpenter Technology's long position.| SIEM OFFSHORE vs. Corsair Gaming | SIEM OFFSHORE vs. Air New Zealand | SIEM OFFSHORE vs. SYSTEMAIR AB | SIEM OFFSHORE vs. ALTAIR RES INC |
| Carpenter Technology vs. thyssenkrupp AG | Carpenter Technology vs. Superior Plus Corp | Carpenter Technology vs. NMI Holdings | Carpenter Technology vs. Origin Agritech |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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