Correlation Between Carrier Global and HALSTEAD JAMES

Can any of the company-specific risk be diversified away by investing in both Carrier Global and HALSTEAD JAMES 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 HALSTEAD JAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carrier Global and HALSTEAD JAMES LS 05, you can compare the effects of market volatilities on Carrier Global and HALSTEAD JAMES 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 HALSTEAD JAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carrier Global and HALSTEAD JAMES.

Diversification Opportunities for Carrier Global and HALSTEAD JAMES

-0.1

Correlation Coefficient

Carrier Global  HALSTEAD JAMES

Good diversification

The 3 months correlation between Carrier and HALSTEAD is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Carrier Global and HALSTEAD JAMES LS 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HALSTEAD JAMES LS 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 HALSTEAD JAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HALSTEAD JAMES LS has no effect on the direction of Carrier Global i.e., Carrier Global and HALSTEAD JAMES go up and down completely randomly.

Pair Corralation between Carrier Global and HALSTEAD JAMES

Assuming the 90 days horizon Carrier Global is expected to generate 15.96 times less return on investment than HALSTEAD JAMES. But when comparing it to its historical volatility, Carrier Global is 1.15 times less risky than HALSTEAD JAMES. It trades about 0.01 of its potential returns per unit of risk. HALSTEAD JAMES LS 05 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  184.00  in HALSTEAD JAMES LS 05 on September 18, 2024 and sell it today you would earn a total of  36.00  from holding HALSTEAD JAMES LS 05 or generate 19.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Carrier Global  vs.  HALSTEAD JAMES LS 05

Carrier Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carrier Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Carrier Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

HALSTEAD JAMES LS

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HALSTEAD JAMES LS 05 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, HALSTEAD JAMES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carrier Global and HALSTEAD JAMES

The main advantage of trading using opposite Carrier Global and HALSTEAD JAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carrier Global position performs unexpectedly, HALSTEAD JAMES 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 HALSTEAD JAMES will offset losses from the drop in HALSTEAD JAMES's long position.

The idea behind Carrier Global and HALSTEAD JAMES LS 05 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.