Correlation Between Tungray Technologies and Carpenter Technology

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

By analyzing existing cross correlation between Tungray Technologies Class and Carpenter Technology, you can compare the effects of market volatilities on Tungray Technologies and Carpenter Technology 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 Tungray Technologies with a short position of Carpenter Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tungray Technologies and Carpenter Technology.

Diversification Opportunities for Tungray Technologies and Carpenter Technology

-0.24

Correlation Coefficient

Tungray Technologies  Carpenter Technology

Very good diversification

The 3 months correlation between Tungray and Carpenter is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Tungray Technologies Class and Carpenter Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carpenter Technology and Tungray Technologies 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 Tungray Technologies Class are associated (or correlated) with Carpenter Technology. 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 Tungray Technologies i.e., Tungray Technologies and Carpenter Technology go up and down completely randomly.

Pair Corralation between Tungray Technologies and Carpenter Technology

Given the investment horizon of 90 days Tungray Technologies Class is expected to under-perform the Carpenter Technology. In addition to that, Tungray Technologies is 1.75 times more volatile than Carpenter Technology. It trades about -0.1 of its total potential returns per unit of risk. Carpenter Technology is currently generating about 0.03 per unit of volatility. If you would invest  19,385  in Carpenter Technology on November 28, 2024 and sell it today you would earn a total of  577.00  from holding Carpenter Technology or generate 2.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tungray Technologies Class  vs.  Carpenter Technology

Tungray Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tungray Technologies Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Carpenter Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carpenter Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Carpenter Technology is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Tungray Technologies and Carpenter Technology

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

The idea behind Tungray Technologies Class and Carpenter Technology 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.