Correlation Between CARRIER and Yum Brands
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By analyzing existing cross correlation between CARRIER GLOBAL P and Yum Brands, you can compare the effects of market volatilities on CARRIER and Yum Brands 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 CARRIER with a short position of Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARRIER and Yum Brands.
Diversification Opportunities for CARRIER and Yum Brands
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between CARRIER and Yum is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding CARRIER GLOBAL P and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands and CARRIER 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 CARRIER GLOBAL P are associated (or correlated) with Yum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yum Brands has no effect on the direction of CARRIER i.e., CARRIER and Yum Brands go up and down completely randomly.
Pair Corralation between CARRIER and Yum Brands
Assuming the 90 days trading horizon CARRIER is expected to generate 2.69 times less return on investment than Yum Brands. But when comparing it to its historical volatility, CARRIER GLOBAL P is 1.64 times less risky than Yum Brands. It trades about 0.02 of its potential returns per unit of risk. Yum Brands is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 12,535 in Yum Brands on September 2, 2024 and sell it today you would earn a total of 1,359 from holding Yum Brands or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.98% |
| Values | Daily Returns |
CARRIER GLOBAL P vs. Yum Brands
Performance |
| Timeline |
| CARRIER GLOBAL P |
| Yum Brands |
CARRIER and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARRIER and Yum Brands
The main advantage of trading using opposite CARRIER and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARRIER position performs unexpectedly, Yum Brands 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 Yum Brands will offset losses from the drop in Yum Brands' long position.| CARRIER vs. GEN Restaurant Group, | CARRIER vs. First Watch Restaurant | CARRIER vs. Yum Brands | CARRIER vs. Amkor Technology |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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