Correlation Between Carbon Streaming and Arrowmark Financial

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

By analyzing existing cross correlation between Carbon Streaming Corp and Arrowmark Financial Corp, you can compare the effects of market volatilities on Carbon Streaming and Arrowmark Financial 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 Carbon Streaming with a short position of Arrowmark Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carbon Streaming and Arrowmark Financial.

Diversification Opportunities for Carbon Streaming and Arrowmark Financial

0.23

Correlation Coefficient

Carbon Streaming  Arrowmark Financial

Modest diversification

The 3 months correlation between Carbon and Arrowmark is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Carbon Streaming Corp and Arrowmark Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrowmark Financial Corp and Carbon Streaming 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 Carbon Streaming Corp are associated (or correlated) with Arrowmark Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrowmark Financial Corp has no effect on the direction of Carbon Streaming i.e., Carbon Streaming and Arrowmark Financial go up and down completely randomly.

Pair Corralation between Carbon Streaming and Arrowmark Financial

Assuming the 90 days horizon Carbon Streaming Corp is expected to under-perform the Arrowmark Financial. In addition to that, Carbon Streaming is 3.69 times more volatile than Arrowmark Financial Corp. It trades about -0.01 of its total potential returns per unit of risk. Arrowmark Financial Corp is currently generating about 0.05 per unit of volatility. If you would invest  1,386  in Arrowmark Financial Corp on October 21, 2024 and sell it today you would earn a total of  732.00  from holding Arrowmark Financial Corp or generate 52.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.81%
Values	Daily Returns

Carbon Streaming Corp  vs.  Arrowmark Financial Corp

Carbon Streaming Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carbon Streaming Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Carbon Streaming may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Arrowmark Financial Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arrowmark Financial Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Arrowmark Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Carbon Streaming and Arrowmark Financial

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

The idea behind Carbon Streaming Corp and Arrowmark Financial Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.