Correlation Between Carters and INGERSOLL

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

By analyzing existing cross correlation between Carters and INGERSOLL RAND GLOBAL HLDG, you can compare the effects of market volatilities on Carters and INGERSOLL 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 INGERSOLL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carters and INGERSOLL.

Diversification Opportunities for Carters and INGERSOLL

-0.33

Correlation Coefficient

Carters  INGERSOLL

Very good diversification

The 3 months correlation between Carters and INGERSOLL is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Carters and INGERSOLL RAND GLOBAL HLDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INGERSOLL RAND GLOBAL 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 INGERSOLL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INGERSOLL RAND GLOBAL has no effect on the direction of Carters i.e., Carters and INGERSOLL go up and down completely randomly.

Pair Corralation between Carters and INGERSOLL

Considering the 90-day investment horizon Carters is expected to generate 2.03 times more return on investment than INGERSOLL. However, Carters is 2.03 times more volatile than INGERSOLL RAND GLOBAL HLDG. It trades about -0.07 of its potential returns per unit of risk. INGERSOLL RAND GLOBAL HLDG is currently generating about -0.34 per unit of risk. If you would invest  5,586  in Carters on October 6, 2024 and sell it today you would lose (149.00) from holding Carters or give up 2.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.0%
Values	Daily Returns

Carters  vs.  INGERSOLL RAND GLOBAL HLDG

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.

INGERSOLL RAND GLOBAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INGERSOLL RAND GLOBAL HLDG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for INGERSOLL RAND GLOBAL HLDG investors.

Pair Trading with Carters and INGERSOLL

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

The idea behind Carters and INGERSOLL RAND GLOBAL HLDG 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.