Correlation Between SG Blocks and Carpenter Technology
Can any of the company-specific risk be diversified away by investing in both SG Blocks 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 SG Blocks and Carpenter Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SG Blocks and Carpenter Technology, you can compare the effects of market volatilities on SG Blocks 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 SG Blocks with a short position of Carpenter Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SG Blocks and Carpenter Technology.
Diversification Opportunities for SG Blocks and Carpenter Technology
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SGBX and Carpenter is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding SG Blocks and Carpenter Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carpenter Technology and SG Blocks 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 SG Blocks 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 SG Blocks i.e., SG Blocks and Carpenter Technology go up and down completely randomly.
Pair Corralation between SG Blocks and Carpenter Technology
Given the investment horizon of 90 days SG Blocks is expected to under-perform the Carpenter Technology. In addition to that, SG Blocks is 4.07 times more volatile than Carpenter Technology. It trades about -0.06 of its total potential returns per unit of risk. Carpenter Technology is currently generating about 0.22 per unit of volatility. If you would invest 6,431 in Carpenter Technology on August 27, 2024 and sell it today you would earn a total of 12,666 from holding Carpenter Technology or generate 196.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SG Blocks vs. Carpenter Technology
Performance |
| Timeline |
| SG Blocks |
| Carpenter Technology |
SG Blocks and Carpenter Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SG Blocks and Carpenter Technology
The main advantage of trading using opposite SG Blocks and Carpenter Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SG Blocks 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.| SG Blocks vs. Dave Warrants | SG Blocks vs. Evolv Technologies Holdings | SG Blocks vs. Aquagold International | SG Blocks vs. Morningstar Unconstrained Allocation |
| Carpenter Technology vs. Haynes International | Carpenter Technology vs. Worthington Industries | Carpenter Technology vs. Ryerson Holding Corp | Carpenter Technology vs. Mueller Industries |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |