Correlation Between Sanyo Special and CARRIER

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

By analyzing existing cross correlation between Sanyo Special Steel and CARRIER GLOBAL P, you can compare the effects of market volatilities on Sanyo Special and CARRIER 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 Sanyo Special with a short position of CARRIER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Special and CARRIER.

Diversification Opportunities for Sanyo Special and CARRIER

-0.31

Correlation Coefficient

Sanyo Special  CARRIER

Very good diversification

The 3 months correlation between Sanyo and CARRIER is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Special Steel and CARRIER GLOBAL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARRIER GLOBAL P and Sanyo Special 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 Sanyo Special Steel are associated (or correlated) with CARRIER. 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 P has no effect on the direction of Sanyo Special i.e., Sanyo Special and CARRIER go up and down completely randomly.

Pair Corralation between Sanyo Special and CARRIER

Assuming the 90 days horizon Sanyo Special Steel is expected to generate 0.13 times more return on investment than CARRIER. However, Sanyo Special Steel is 7.5 times less risky than CARRIER. It trades about 0.12 of its potential returns per unit of risk. CARRIER GLOBAL P is currently generating about -0.16 per unit of risk. If you would invest  1,834  in Sanyo Special Steel on September 23, 2024 and sell it today you would earn a total of  13.00  from holding Sanyo Special Steel or generate 0.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Sanyo Special Steel  vs.  CARRIER GLOBAL P

Sanyo Special Steel

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sanyo Special Steel are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Sanyo Special is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CARRIER GLOBAL P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARRIER GLOBAL P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CARRIER GLOBAL P investors.

Pair Trading with Sanyo Special and CARRIER

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

The idea behind Sanyo Special Steel and CARRIER GLOBAL 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.