Correlation Between Inwido AB and Carrier Global

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

By analyzing existing cross correlation between Inwido AB and Carrier Global, you can compare the effects of market volatilities on Inwido AB and Carrier Global 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 Inwido AB with a short position of Carrier Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inwido AB and Carrier Global.

Diversification Opportunities for Inwido AB and Carrier Global

-0.5

Correlation Coefficient

Inwido AB  Carrier Global

Very good diversification

The 3 months correlation between Inwido and Carrier is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Inwido AB and Carrier Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrier Global and Inwido AB 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 Inwido AB are associated (or correlated) with Carrier Global. 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 has no effect on the direction of Inwido AB i.e., Inwido AB and Carrier Global go up and down completely randomly.

Pair Corralation between Inwido AB and Carrier Global

Assuming the 90 days horizon Inwido AB is expected to generate 0.92 times more return on investment than Carrier Global. However, Inwido AB is 1.08 times less risky than Carrier Global. It trades about 0.0 of its potential returns per unit of risk. Carrier Global is currently generating about -0.07 per unit of risk. If you would invest  1,604  in Inwido AB on September 22, 2024 and sell it today you would lose (9.00) from holding Inwido AB or give up 0.56% of portfolio value over 90 days.

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

Inwido AB  vs.  Carrier Global

Inwido AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Carrier Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carrier Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Inwido AB and Carrier Global

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

The idea behind Inwido AB and Carrier Global 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.