Correlation Between Carpenter Technology and Nuveen Symphony
Can any of the company-specific risk be diversified away by investing in both Carpenter Technology and Nuveen Symphony 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 Carpenter Technology and Nuveen Symphony into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carpenter Technology and Nuveen Symphony Floating, you can compare the effects of market volatilities on Carpenter Technology and Nuveen Symphony 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 Technology with a short position of Nuveen Symphony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carpenter Technology and Nuveen Symphony.
Diversification Opportunities for Carpenter Technology and Nuveen Symphony
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Carpenter and Nuveen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Carpenter Technology and Nuveen Symphony Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Symphony Floating and Carpenter Technology 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 are associated (or correlated) with Nuveen Symphony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Symphony Floating has no effect on the direction of Carpenter Technology i.e., Carpenter Technology and Nuveen Symphony go up and down completely randomly.
Pair Corralation between Carpenter Technology and Nuveen Symphony
Considering the 90-day investment horizon Carpenter Technology is expected to under-perform the Nuveen Symphony. In addition to that, Carpenter Technology is 13.28 times more volatile than Nuveen Symphony Floating. It trades about -0.24 of its total potential returns per unit of risk. Nuveen Symphony Floating is currently generating about 0.17 per unit of volatility. If you would invest 1,817 in Nuveen Symphony Floating on March 17, 2024 and sell it today you would earn a total of 12.00 from holding Nuveen Symphony Floating or generate 0.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 95.45% |
Values | Daily Returns |
Carpenter Technology vs. Nuveen Symphony Floating
Performance |
Timeline |
Carpenter Technology |
Nuveen Symphony Floating |
Carpenter Technology and Nuveen Symphony Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Carpenter Technology and Nuveen Symphony
The main advantage of trading using opposite Carpenter Technology and Nuveen Symphony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carpenter Technology position performs unexpectedly, Nuveen Symphony 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 Nuveen Symphony will offset losses from the drop in Nuveen Symphony's long position.Carpenter Technology vs. Northwest Pipe | Carpenter Technology vs. Insteel Industries | Carpenter Technology vs. ESAB Corp | Carpenter Technology vs. Gulf Island Fabrication |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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