Correlation Between BELIMO Holding and Carlisle Companies

Can any of the company-specific risk be diversified away by investing in both BELIMO Holding and Carlisle Companies 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 BELIMO Holding and Carlisle Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BELIMO Holding AG and Carlisle Companies Incorporated, you can compare the effects of market volatilities on BELIMO Holding and Carlisle Companies 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 BELIMO Holding with a short position of Carlisle Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of BELIMO Holding and Carlisle Companies.

Diversification Opportunities for BELIMO Holding and Carlisle Companies

0.59

Correlation Coefficient

BELIMO Holding  Carlisle Companies

Very weak diversification

The 3 months correlation between BELIMO and Carlisle is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BELIMO Holding AG and Carlisle Companies Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlisle Companies and BELIMO Holding 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 BELIMO Holding AG are associated (or correlated) with Carlisle Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlisle Companies has no effect on the direction of BELIMO Holding i.e., BELIMO Holding and Carlisle Companies go up and down completely randomly.

Pair Corralation between BELIMO Holding and Carlisle Companies

If you would invest  67,872  in BELIMO Holding AG on December 7, 2024 and sell it today you would earn a total of  0.00  from holding BELIMO Holding AG or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

BELIMO Holding AG  vs.  Carlisle Companies Incorporate

BELIMO Holding AG

Risk-Adjusted Performance

Very Weak

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

Carlisle Companies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carlisle Companies Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with BELIMO Holding and Carlisle Companies

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

The idea behind BELIMO Holding AG and Carlisle Companies Incorporated 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.