Correlation Between Ansell and Carrier Global

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

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

Diversification Opportunities for Ansell and Carrier Global

-0.38

Correlation Coefficient

Ansell  Carrier Global

Very good diversification

The 3 months correlation between Ansell and Carrier is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ansell Ltd ADR and Carrier Global Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrier Global Corp and Ansell 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 Ansell Ltd ADR 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 Corp has no effect on the direction of Ansell i.e., Ansell and Carrier Global go up and down completely randomly.

Pair Corralation between Ansell and Carrier Global

If you would invest  6,988  in Carrier Global Corp on August 31, 2024 and sell it today you would earn a total of  702.00  from holding Carrier Global Corp or generate 10.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Ansell Ltd ADR  vs.  Carrier Global Corp

Ansell Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ansell Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Ansell is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Carrier Global Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carrier Global Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Carrier Global may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Ansell and Carrier Global

The main advantage of trading using opposite Ansell and Carrier Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ansell 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 Ansell Ltd ADR and Carrier Global Corp 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.