Correlation Between Carlson Investments and New Tech

Can any of the company-specific risk be diversified away by investing in both Carlson Investments and New Tech 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 Carlson Investments and New Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carlson Investments SA and New Tech Venture, you can compare the effects of market volatilities on Carlson Investments and New Tech 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 Carlson Investments with a short position of New Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlson Investments and New Tech.

Diversification Opportunities for Carlson Investments and New Tech

0.24

Correlation Coefficient

Carlson Investments  New Tech

Modest diversification

The 3 months correlation between Carlson and New is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Carlson Investments SA and New Tech Venture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Tech Venture and Carlson Investments 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 Carlson Investments SA are associated (or correlated) with New Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Tech Venture has no effect on the direction of Carlson Investments i.e., Carlson Investments and New Tech go up and down completely randomly.

Pair Corralation between Carlson Investments and New Tech

Assuming the 90 days trading horizon Carlson Investments SA is expected to generate 1.0 times more return on investment than New Tech. However, Carlson Investments is 1.0 times more volatile than New Tech Venture. It trades about -0.06 of its potential returns per unit of risk. New Tech Venture is currently generating about -0.14 per unit of risk. If you would invest  524.00  in Carlson Investments SA on August 30, 2024 and sell it today you would lose (75.00) from holding Carlson Investments SA or give up 14.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	64.52%
Values	Daily Returns

Carlson Investments SA  vs.  New Tech Venture

Carlson Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlson Investments SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak 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.

New Tech Venture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Tech Venture has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Carlson Investments and New Tech

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

The idea behind Carlson Investments SA and New Tech Venture 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.