Correlation Between CARPENTER and ArcelorMittal
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By analyzing existing cross correlation between CARPENTER TECHNOLOGY P and ArcelorMittal SA ADR, you can compare the effects of market volatilities on CARPENTER and ArcelorMittal 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 ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARPENTER and ArcelorMittal.
Diversification Opportunities for CARPENTER and ArcelorMittal
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CARPENTER and ArcelorMittal is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CARPENTER TECHNOLOGY P and ArcelorMittal SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA ADR has no effect on the direction of CARPENTER i.e., CARPENTER and ArcelorMittal go up and down completely randomly.
Pair Corralation between CARPENTER and ArcelorMittal
Assuming the 90 days trading horizon CARPENTER TECHNOLOGY P is expected to generate 0.12 times more return on investment than ArcelorMittal. However, CARPENTER TECHNOLOGY P is 8.35 times less risky than ArcelorMittal. It trades about -0.08 of its potential returns per unit of risk. ArcelorMittal SA ADR is currently generating about -0.21 per unit of risk. If you would invest 10,025 in CARPENTER TECHNOLOGY P on September 19, 2024 and sell it today you would lose (45.00) from holding CARPENTER TECHNOLOGY P or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CARPENTER TECHNOLOGY P vs. ArcelorMittal SA ADR
Performance |
| Timeline |
| CARPENTER TECHNOLOGY |
| ArcelorMittal SA ADR |
CARPENTER and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARPENTER and ArcelorMittal
The main advantage of trading using opposite CARPENTER and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARPENTER position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.| CARPENTER vs. AEP TEX INC | CARPENTER vs. US BANK NATIONAL | CARPENTER vs. Applied Blockchain | CARPENTER vs. BigBearai 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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