Correlation Between CARPENTER and Sparta Capital
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By analyzing existing cross correlation between CARPENTER TECHNOLOGY P and Sparta Capital, you can compare the effects of market volatilities on CARPENTER and Sparta Capital 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 Sparta Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARPENTER and Sparta Capital.
Diversification Opportunities for CARPENTER and Sparta Capital
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between CARPENTER and Sparta is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CARPENTER TECHNOLOGY P and Sparta Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparta Capital 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 Sparta Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparta Capital has no effect on the direction of CARPENTER i.e., CARPENTER and Sparta Capital go up and down completely randomly.
Pair Corralation between CARPENTER and Sparta Capital
Assuming the 90 days trading horizon CARPENTER is expected to generate 77.39 times less return on investment than Sparta Capital. But when comparing it to its historical volatility, CARPENTER TECHNOLOGY P is 21.05 times less risky than Sparta Capital. It trades about 0.01 of its potential returns per unit of risk. Sparta Capital is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.66 in Sparta Capital on August 26, 2024 and sell it today you would earn a total of 0.84 from holding Sparta Capital or generate 127.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
CARPENTER TECHNOLOGY P vs. Sparta Capital
Performance |
| Timeline |
| CARPENTER TECHNOLOGY |
| Sparta Capital |
CARPENTER and Sparta Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARPENTER and Sparta Capital
The main advantage of trading using opposite CARPENTER and Sparta Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARPENTER position performs unexpectedly, Sparta Capital 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 Sparta Capital will offset losses from the drop in Sparta Capital's long position.| CARPENTER vs. Amgen Inc | CARPENTER vs. Tarsus Pharmaceuticals | CARPENTER vs. Ardelyx | CARPENTER vs. Genfit |
| Sparta Capital vs. Copa Holdings SA | Sparta Capital vs. United Airlines Holdings | Sparta Capital vs. Delta Air Lines | Sparta Capital vs. SkyWest |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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