Correlation Between 78409VBK9 and Carters

Can any of the company-specific risk be diversified away by investing in both 78409VBK9 and Carters 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 78409VBK9 and Carters into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPGI 29 01 MAR 32 and Carters, you can compare the effects of market volatilities on 78409VBK9 and Carters 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 78409VBK9 with a short position of Carters. Check out your portfolio center. Please also check ongoing floating volatility patterns of 78409VBK9 and Carters.

Diversification Opportunities for 78409VBK9 and Carters

0.31

Correlation Coefficient

78409VBK9  Carters

Weak diversification

The 3 months correlation between 78409VBK9 and Carters is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SPGI 29 01 MAR 32 and Carters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carters and 78409VBK9 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 SPGI 29 01 MAR 32 are associated (or correlated) with Carters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carters has no effect on the direction of 78409VBK9 i.e., 78409VBK9 and Carters go up and down completely randomly.

Pair Corralation between 78409VBK9 and Carters

Assuming the 90 days trading horizon SPGI 29 01 MAR 32 is expected to generate 0.3 times more return on investment than Carters. However, SPGI 29 01 MAR 32 is 3.34 times less risky than Carters. It trades about 0.01 of its potential returns per unit of risk. Carters is currently generating about -0.03 per unit of risk. If you would invest  8,623  in SPGI 29 01 MAR 32 on October 13, 2024 and sell it today you would earn a total of  97.00  from holding SPGI 29 01 MAR 32 or generate 1.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.12%
Values	Daily Returns

SPGI 29 01 MAR 32  vs.  Carters

SPGI 29 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPGI 29 01 MAR 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 78409VBK9 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Carters

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carters has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with 78409VBK9 and Carters

The main advantage of trading using opposite 78409VBK9 and Carters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 78409VBK9 position performs unexpectedly, Carters 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 Carters will offset losses from the drop in Carters' long position.

The idea behind SPGI 29 01 MAR 32 and Carters 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..