Correlation Between KBL Merger and Carlisle Companies

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Can any of the company-specific risk be diversified away by investing in both KBL Merger and Carlisle Companies 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 KBL Merger and Carlisle Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBL Merger Corp and Carlisle Companies Incorporated, you can compare the effects of market volatilities on KBL Merger and Carlisle Companies 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 KBL Merger with a short position of Carlisle Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBL Merger and Carlisle Companies.

Diversification Opportunities for KBL Merger and Carlisle Companies

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between KBL and Carlisle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KBL Merger Corp and Carlisle Companies Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlisle Companies and KBL Merger 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 KBL Merger Corp are associated (or correlated) with Carlisle Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlisle Companies has no effect on the direction of KBL Merger i.e., KBL Merger and Carlisle Companies go up and down completely randomly.

Pair Corralation between KBL Merger and Carlisle Companies

If you would invest  25,032  in Carlisle Companies Incorporated on December 29, 2023 and sell it today you would earn a total of  13,830  from holding Carlisle Companies Incorporated or generate 55.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

KBL Merger Corp  vs.  Carlisle Companies Incorporate

 Performance 
       Timeline  
KBL Merger Corp 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days KBL Merger Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, KBL Merger is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
Carlisle Companies 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Carlisle Companies Incorporated are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Carlisle Companies disclosed solid returns over the last few months and may actually be approaching a breakup point.

KBL Merger and Carlisle Companies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KBL Merger and Carlisle Companies

The main advantage of trading using opposite KBL Merger and Carlisle Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBL Merger position performs unexpectedly, Carlisle Companies 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 Carlisle Companies will offset losses from the drop in Carlisle Companies' long position.
The idea behind KBL Merger Corp and Carlisle Companies Incorporated 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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