Correlation Between Carpenter Technology and Nuveen Symphony

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

By analyzing existing cross correlation between Carpenter Technology and Nuveen Symphony Floating, you can compare the effects of market volatilities on Carpenter Technology and Nuveen Symphony 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 Carpenter Technology with a short position of Nuveen Symphony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carpenter Technology and Nuveen Symphony.

Diversification Opportunities for Carpenter Technology and Nuveen Symphony

0.89

Correlation Coefficient

Carpenter Technology  Nuveen Symphony

Very poor diversification

The 3 months correlation between Carpenter and Nuveen is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Carpenter Technology and Nuveen Symphony Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Symphony Floating and Carpenter Technology 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 Carpenter Technology are associated (or correlated) with Nuveen Symphony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Symphony Floating has no effect on the direction of Carpenter Technology i.e., Carpenter Technology and Nuveen Symphony go up and down completely randomly.

Pair Corralation between Carpenter Technology and Nuveen Symphony

Considering the 90-day investment horizon Carpenter Technology is expected to generate 15.15 times more return on investment than Nuveen Symphony. However, Carpenter Technology is 15.15 times more volatile than Nuveen Symphony Floating. It trades about 0.32 of its potential returns per unit of risk. Nuveen Symphony Floating is currently generating about 0.25 per unit of risk. If you would invest  6,429  in Carpenter Technology on February 23, 2024 and sell it today you would earn a total of  4,357  from holding Carpenter Technology or generate 67.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.46%
Values	Daily Returns

Carpenter Technology  vs.  Nuveen Symphony Floating

Carpenter Technology

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carpenter Technology are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Carpenter Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nuveen Symphony Floating

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Symphony Floating are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Nuveen Symphony is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Carpenter Technology and Nuveen Symphony

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

The idea behind Carpenter Technology and Nuveen Symphony Floating 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 Stocks Directory module to find actively traded stocks across global markets.