Correlation Between Carlton Investments and Hawsons Iron

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

By analyzing existing cross correlation between Carlton Investments and Hawsons Iron, you can compare the effects of market volatilities on Carlton Investments and Hawsons Iron 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 Hawsons Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlton Investments and Hawsons Iron.

Diversification Opportunities for Carlton Investments and Hawsons Iron

-0.62

Correlation Coefficient

Carlton Investments  Hawsons Iron

Excellent diversification

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

Pair Corralation between Carlton Investments and Hawsons Iron

Assuming the 90 days trading horizon Carlton Investments is expected to generate 0.18 times more return on investment than Hawsons Iron. However, Carlton Investments is 5.55 times less risky than Hawsons Iron. It trades about 0.09 of its potential returns per unit of risk. Hawsons Iron is currently generating about -0.03 per unit of risk. If you would invest  2,973  in Carlton Investments on December 31, 2024 and sell it today you would earn a total of  167.00  from holding Carlton Investments or generate 5.62% return on investment over 90 days.

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

Carlton Investments  vs.  Hawsons Iron

Carlton Investments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlton Investments are ranked lower than 7 (%) 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.

Hawsons Iron

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hawsons Iron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators 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 Hawsons Iron

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

The idea behind Carlton Investments and Hawsons Iron 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.

Check out your portfolio center.

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.