Correlation Between Trane Technologies and Caesarstone
Can any of the company-specific risk be diversified away by investing in both Trane Technologies and Caesarstone 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 Trane Technologies and Caesarstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trane Technologies plc and Caesarstone, you can compare the effects of market volatilities on Trane Technologies and Caesarstone 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 Trane Technologies with a short position of Caesarstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trane Technologies and Caesarstone.
Diversification Opportunities for Trane Technologies and Caesarstone
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Trane and Caesarstone is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Trane Technologies plc and Caesarstone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caesarstone and Trane Technologies 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 Trane Technologies plc are associated (or correlated) with Caesarstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caesarstone has no effect on the direction of Trane Technologies i.e., Trane Technologies and Caesarstone go up and down completely randomly.
Pair Corralation between Trane Technologies and Caesarstone
Allowing for the 90-day total investment horizon Trane Technologies plc is expected to generate 0.38 times more return on investment than Caesarstone. However, Trane Technologies plc is 2.6 times less risky than Caesarstone. It trades about 0.17 of its potential returns per unit of risk. Caesarstone is currently generating about 0.03 per unit of risk. If you would invest 25,003 in Trane Technologies plc on August 28, 2024 and sell it today you would earn a total of 16,329 from holding Trane Technologies plc or generate 65.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trane Technologies plc vs. Caesarstone
Performance |
| Timeline |
| Trane Technologies plc |
| Caesarstone |
Trane Technologies and Caesarstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trane Technologies and Caesarstone
The main advantage of trading using opposite Trane Technologies and Caesarstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trane Technologies position performs unexpectedly, Caesarstone 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 Caesarstone will offset losses from the drop in Caesarstone's long position.| Trane Technologies vs. Fortune Brands Innovations | Trane Technologies vs. Johnson Controls International | Trane Technologies vs. Lennox International | Trane Technologies vs. Builders FirstSource |
| Caesarstone vs. Trex Company | Caesarstone vs. Gibraltar Industries | Caesarstone vs. Travis Perkins PLC | Caesarstone vs. Janus International Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |