Correlation Between CARPENTER and SPENN Technology

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

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

Diversification Opportunities for CARPENTER and SPENN Technology

0.0

Correlation Coefficient

CARPENTER  SPENN Technology

Pay attention - limited upside

The 3 months correlation between CARPENTER and SPENN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CARPENTER TECHNOLOGY P and SPENN Technology AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPENN Technology and CARPENTER 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 CARPENTER TECHNOLOGY P are associated (or correlated) with SPENN Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPENN Technology has no effect on the direction of CARPENTER i.e., CARPENTER and SPENN Technology go up and down completely randomly.

Pair Corralation between CARPENTER and SPENN Technology

If you would invest  10,026  in CARPENTER TECHNOLOGY P on September 24, 2024 and sell it today you would lose (16.00) from holding CARPENTER TECHNOLOGY P or give up 0.16% of portfolio value over 90 days.

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

CARPENTER TECHNOLOGY P  vs.  SPENN Technology AS

CARPENTER TECHNOLOGY

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CARPENTER TECHNOLOGY P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CARPENTER is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

SPENN Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPENN Technology AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SPENN Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CARPENTER and SPENN Technology

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

The idea behind CARPENTER TECHNOLOGY P and SPENN Technology AS 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 Transaction History module to view history of all your transactions and understand their impact on performance.