Correlation Between Montana Technologies and Carrier Global

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

By analyzing existing cross correlation between Montana Technologies and Carrier Global Corp, you can compare the effects of market volatilities on Montana Technologies and Carrier Global 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 Montana Technologies with a short position of Carrier Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Montana Technologies and Carrier Global.

Diversification Opportunities for Montana Technologies and Carrier Global

0.26

Correlation Coefficient

Montana Technologies  Carrier Global

Modest diversification

The 3 months correlation between Montana and Carrier is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Montana Technologies and Carrier Global Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrier Global Corp and Montana Technologies 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 Montana Technologies are associated (or correlated) with Carrier Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrier Global Corp has no effect on the direction of Montana Technologies i.e., Montana Technologies and Carrier Global go up and down completely randomly.

Pair Corralation between Montana Technologies and Carrier Global

Assuming the 90 days horizon Montana Technologies is expected to under-perform the Carrier Global. In addition to that, Montana Technologies is 4.26 times more volatile than Carrier Global Corp. It trades about -0.06 of its total potential returns per unit of risk. Carrier Global Corp is currently generating about -0.06 per unit of volatility. If you would invest  6,823  in Carrier Global Corp on December 30, 2024 and sell it today you would lose (490.00) from holding Carrier Global Corp or give up 7.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Montana Technologies  vs.  Carrier Global Corp

Montana Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Montana Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Carrier Global Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carrier Global Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Montana Technologies and Carrier Global

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

The idea behind Montana Technologies and Carrier Global Corp 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.