Correlation Between Chester Mining and CARPENTER

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

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

Diversification Opportunities for Chester Mining and CARPENTER

0.0

Correlation Coefficient

Chester Mining  CARPENTER

Pay attention - limited upside

The 3 months correlation between Chester and CARPENTER is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chester Mining and CARPENTER TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARPENTER TECHNOLOGY and Chester Mining 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 Chester Mining are associated (or correlated) with CARPENTER. 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 Chester Mining i.e., Chester Mining and CARPENTER go up and down completely randomly.

Pair Corralation between Chester Mining and CARPENTER

If you would invest  0.02  in Chester Mining on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Chester Mining or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Chester Mining  vs.  CARPENTER TECHNOLOGY P

Chester Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chester Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Chester Mining is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

CARPENTER TECHNOLOGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARPENTER TECHNOLOGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CARPENTER is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chester Mining and CARPENTER

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

The idea behind Chester Mining and CARPENTER TECHNOLOGY P 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.