Correlation Between CARPENTER and Barloworld
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By analyzing existing cross correlation between CARPENTER TECHNOLOGY P and Barloworld Ltd ADR, you can compare the effects of market volatilities on CARPENTER and Barloworld 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 CARPENTER with a short position of Barloworld. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARPENTER and Barloworld.
Diversification Opportunities for CARPENTER and Barloworld
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between CARPENTER and Barloworld is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CARPENTER TECHNOLOGY P and Barloworld Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barloworld ADR and CARPENTER 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 CARPENTER TECHNOLOGY P are associated (or correlated) with Barloworld. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barloworld ADR has no effect on the direction of CARPENTER i.e., CARPENTER and Barloworld go up and down completely randomly.
Pair Corralation between CARPENTER and Barloworld
Assuming the 90 days trading horizon CARPENTER is expected to generate 31.11 times less return on investment than Barloworld. But when comparing it to its historical volatility, CARPENTER TECHNOLOGY P is 13.82 times less risky than Barloworld. It trades about 0.01 of its potential returns per unit of risk. Barloworld Ltd ADR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 581.00 in Barloworld Ltd ADR on August 26, 2024 and sell it today you would lose (158.00) from holding Barloworld Ltd ADR or give up 27.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 71.77% |
| Values | Daily Returns |
CARPENTER TECHNOLOGY P vs. Barloworld Ltd ADR
Performance |
| Timeline |
| CARPENTER TECHNOLOGY |
| Barloworld ADR |
CARPENTER and Barloworld Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARPENTER and Barloworld
The main advantage of trading using opposite CARPENTER and Barloworld positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARPENTER position performs unexpectedly, Barloworld 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 Barloworld will offset losses from the drop in Barloworld's long position.| CARPENTER vs. Amgen Inc | CARPENTER vs. Tarsus Pharmaceuticals | CARPENTER vs. Ardelyx | CARPENTER vs. Genfit |
| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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