Correlation Between Plexus Corp and CARRIER

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

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

Diversification Opportunities for Plexus Corp and CARRIER

-0.62

Correlation Coefficient

Plexus Corp  CARRIER

Excellent diversification

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

Pair Corralation between Plexus Corp and CARRIER

Given the investment horizon of 90 days Plexus Corp is expected to under-perform the CARRIER. In addition to that, Plexus Corp is 3.28 times more volatile than CARRIER GLOBAL P. It trades about -0.14 of its total potential returns per unit of risk. CARRIER GLOBAL P is currently generating about -0.01 per unit of volatility. If you would invest  7,716  in CARRIER GLOBAL P on December 24, 2024 and sell it today you would lose (37.00) from holding CARRIER GLOBAL P or give up 0.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Plexus Corp  vs.  CARRIER GLOBAL P

Plexus Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Plexus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CARRIER GLOBAL P

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Plexus Corp and CARRIER

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

The idea behind Plexus Corp and CARRIER GLOBAL 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.