Correlation Between Carrier Global and NORDIC HALIBUT
Can any of the company-specific risk be diversified away by investing in both Carrier Global and NORDIC HALIBUT 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 Carrier Global and NORDIC HALIBUT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carrier Global and NORDIC HALIBUT AS, you can compare the effects of market volatilities on Carrier Global and NORDIC HALIBUT 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 Global with a short position of NORDIC HALIBUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carrier Global and NORDIC HALIBUT.
Diversification Opportunities for Carrier Global and NORDIC HALIBUT
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Carrier and NORDIC is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Carrier Global and NORDIC HALIBUT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDIC HALIBUT AS and Carrier Global 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 are associated (or correlated) with NORDIC HALIBUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDIC HALIBUT AS has no effect on the direction of Carrier Global i.e., Carrier Global and NORDIC HALIBUT go up and down completely randomly.
Pair Corralation between Carrier Global and NORDIC HALIBUT
Assuming the 90 days horizon Carrier Global is expected to generate 0.82 times more return on investment than NORDIC HALIBUT. However, Carrier Global is 1.22 times less risky than NORDIC HALIBUT. It trades about 0.02 of its potential returns per unit of risk. NORDIC HALIBUT AS is currently generating about -0.18 per unit of risk. If you would invest 6,873 in Carrier Global on September 17, 2024 and sell it today you would earn a total of 117.00 from holding Carrier Global or generate 1.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Carrier Global vs. NORDIC HALIBUT AS
Performance |
Timeline |
Carrier Global |
NORDIC HALIBUT AS |
Carrier Global and NORDIC HALIBUT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Carrier Global and NORDIC HALIBUT
The main advantage of trading using opposite Carrier Global and NORDIC HALIBUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carrier Global position performs unexpectedly, NORDIC HALIBUT 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 NORDIC HALIBUT will offset losses from the drop in NORDIC HALIBUT's long position.Carrier Global vs. Geberit AG | Carrier Global vs. Superior Plus Corp | Carrier Global vs. Origin Agritech | Carrier Global vs. INTUITIVE SURGICAL |
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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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