Correlation Between Carlton Investments and ABACUS STORAGE

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

By analyzing existing cross correlation between Carlton Investments and ABACUS STORAGE KING, you can compare the effects of market volatilities on Carlton Investments and ABACUS STORAGE 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 Carlton Investments with a short position of ABACUS STORAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlton Investments and ABACUS STORAGE.

Diversification Opportunities for Carlton Investments and ABACUS STORAGE

-0.62

Correlation Coefficient

Carlton Investments  ABACUS STORAGE

Excellent diversification

The 3 months correlation between Carlton and ABACUS is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Carlton Investments and ABACUS STORAGE KING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABACUS STORAGE KING and Carlton 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 Carlton Investments are associated (or correlated) with ABACUS STORAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABACUS STORAGE KING has no effect on the direction of Carlton Investments i.e., Carlton Investments and ABACUS STORAGE go up and down completely randomly.

Pair Corralation between Carlton Investments and ABACUS STORAGE

Assuming the 90 days trading horizon Carlton Investments is expected to under-perform the ABACUS STORAGE. But the stock apears to be less risky and, when comparing its historical volatility, Carlton Investments is 1.45 times less risky than ABACUS STORAGE. The stock trades about -0.09 of its potential returns per unit of risk. The ABACUS STORAGE KING is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  117.00  in ABACUS STORAGE KING on October 6, 2024 and sell it today you would lose (2.00) from holding ABACUS STORAGE KING or give up 1.71% of portfolio value over 90 days.

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

Carlton Investments  vs.  ABACUS STORAGE KING

Carlton Investments

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carlton Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Carlton Investments is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ABACUS STORAGE KING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABACUS STORAGE KING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Carlton Investments and ABACUS STORAGE

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

The idea behind Carlton Investments and ABACUS STORAGE KING 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.