Correlation Between Integral and CARPENTER

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

By analyzing existing cross correlation between Integral Ad Science and CARPENTER TECHNOLOGY P, you can compare the effects of market volatilities on Integral and CARPENTER 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 Integral with a short position of CARPENTER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and CARPENTER.

Diversification Opportunities for Integral and CARPENTER

0.03

Correlation Coefficient

Integral  CARPENTER

Significant diversification

The 3 months correlation between Integral and CARPENTER is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and CARPENTER TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARPENTER TECHNOLOGY and Integral 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 Integral Ad Science are associated (or correlated) with CARPENTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARPENTER TECHNOLOGY has no effect on the direction of Integral i.e., Integral and CARPENTER go up and down completely randomly.

Pair Corralation between Integral and CARPENTER

Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the CARPENTER. In addition to that, Integral is 2.86 times more volatile than CARPENTER TECHNOLOGY P. It trades about -0.03 of its total potential returns per unit of risk. CARPENTER TECHNOLOGY P is currently generating about -0.07 per unit of volatility. If you would invest  10,060  in CARPENTER TECHNOLOGY P on October 8, 2024 and sell it today you would lose (50.00) from holding CARPENTER TECHNOLOGY P or give up 0.5% of portfolio value over 90 days.

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

Integral Ad Science  vs.  CARPENTER TECHNOLOGY P

Integral Ad Science

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Integral Ad Science are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Integral may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CARPENTER TECHNOLOGY

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Integral and CARPENTER

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

The idea behind Integral Ad Science and CARPENTER TECHNOLOGY P 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.