Correlation Between Carlisle Companies and Yuexiu Transport

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

By analyzing existing cross correlation between Carlisle Companies Incorporated and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Carlisle Companies and Yuexiu Transport 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 Carlisle Companies with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlisle Companies and Yuexiu Transport.

Diversification Opportunities for Carlisle Companies and Yuexiu Transport

0.0

Correlation Coefficient

Carlisle Companies  Yuexiu Transport

Pay attention - limited upside

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

Pair Corralation between Carlisle Companies and Yuexiu Transport

Considering the 90-day investment horizon Carlisle Companies Incorporated is expected to generate 62.35 times more return on investment than Yuexiu Transport. However, Carlisle Companies is 62.35 times more volatile than Yuexiu Transport Infrastructure. It trades about 0.33 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.21 per unit of risk. If you would invest  36,884  in Carlisle Companies Incorporated on February 17, 2024 and sell it today you would earn a total of  4,621  from holding Carlisle Companies Incorporated or generate 12.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Carlisle Companies Incorporate  vs.  Yuexiu Transport Infrastructur

Carlisle Companies

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carlisle Companies Incorporated are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Carlisle Companies disclosed solid returns over the last few months and may actually be approaching a breakup point.

Yuexiu Transport Inf

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Carlisle Companies and Yuexiu Transport

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

The idea behind Carlisle Companies Incorporated and Yuexiu Transport Infrastructure 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.