Correlation Between Carlisle Companies and Core Molding
Can any of the company-specific risk be diversified away by investing in both Carlisle Companies and Core Molding 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 Carlisle Companies and Core Molding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlisle Companies Incorporated and Core Molding Technologies, you can compare the effects of market volatilities on Carlisle Companies and Core Molding 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 Carlisle Companies with a short position of Core Molding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlisle Companies and Core Molding.
Diversification Opportunities for Carlisle Companies and Core Molding
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Carlisle and Core is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Carlisle Companies Incorporate and Core Molding Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Molding Technologies and Carlisle Companies 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 Carlisle Companies Incorporated are associated (or correlated) with Core Molding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Molding Technologies has no effect on the direction of Carlisle Companies i.e., Carlisle Companies and Core Molding go up and down completely randomly.
Pair Corralation between Carlisle Companies and Core Molding
Considering the 90-day investment horizon Carlisle Companies Incorporated is expected to generate 0.46 times more return on investment than Core Molding. However, Carlisle Companies Incorporated is 2.18 times less risky than Core Molding. It trades about 0.15 of its potential returns per unit of risk. Core Molding Technologies is currently generating about -0.05 per unit of risk. If you would invest 36,082 in Carlisle Companies Incorporated on March 12, 2024 and sell it today you would earn a total of 4,803 from holding Carlisle Companies Incorporated or generate 13.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Carlisle Companies Incorporate vs. Core Molding Technologies
Performance |
Timeline |
Carlisle Companies |
Core Molding Technologies |
Carlisle Companies and Core Molding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Carlisle Companies and Core Molding
The main advantage of trading using opposite Carlisle Companies and Core Molding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlisle Companies position performs unexpectedly, Core Molding 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 Core Molding will offset losses from the drop in Core Molding's long position.Carlisle Companies vs. Louisiana Pacific | Carlisle Companies vs. Masco | Carlisle Companies vs. Fortune Brands Innovations | Carlisle Companies vs. Trane Technologies plc |
Core Molding vs. H B Fuller | Core Molding vs. Element Solutions | Core Molding vs. Innospec | Core Molding vs. Cabot |
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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