Correlation Between Carters and Harsco

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

By analyzing existing cross correlation between Carters and Harsco 575 percent, you can compare the effects of market volatilities on Carters and Harsco 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 Carters with a short position of Harsco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carters and Harsco.

Diversification Opportunities for Carters and Harsco

0.32

Correlation Coefficient

Carters  Harsco

Weak diversification

The 3 months correlation between Carters and Harsco is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Carters and Harsco 575 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harsco 575 percent and Carters 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 Carters are associated (or correlated) with Harsco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harsco 575 percent has no effect on the direction of Carters i.e., Carters and Harsco go up and down completely randomly.

Pair Corralation between Carters and Harsco

Considering the 90-day investment horizon Carters is expected to under-perform the Harsco. In addition to that, Carters is 4.15 times more volatile than Harsco 575 percent. It trades about -0.07 of its total potential returns per unit of risk. Harsco 575 percent is currently generating about -0.26 per unit of volatility. If you would invest  9,619  in Harsco 575 percent on October 6, 2024 and sell it today you would lose (186.00) from holding Harsco 575 percent or give up 1.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Carters  vs.  Harsco 575 percent

Carters

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carters has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Harsco 575 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harsco 575 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Harsco is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Carters and Harsco

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

The idea behind Carters and Harsco 575 percent 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.