Correlation Between Carpenter Technology and Ampco Pittsburgh
Can any of the company-specific risk be diversified away by investing in both Carpenter Technology and Ampco Pittsburgh 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 Ampco Pittsburgh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carpenter Technology and Ampco Pittsburgh, you can compare the effects of market volatilities on Carpenter Technology and Ampco Pittsburgh 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 Ampco Pittsburgh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carpenter Technology and Ampco Pittsburgh.
Diversification Opportunities for Carpenter Technology and Ampco Pittsburgh
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Carpenter and Ampco is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Carpenter Technology and Ampco Pittsburgh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampco Pittsburgh 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 Ampco Pittsburgh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampco Pittsburgh has no effect on the direction of Carpenter Technology i.e., Carpenter Technology and Ampco Pittsburgh go up and down completely randomly.
Pair Corralation between Carpenter Technology and Ampco Pittsburgh
Considering the 90-day investment horizon Carpenter Technology is expected to generate 0.53 times more return on investment than Ampco Pittsburgh. However, Carpenter Technology is 1.9 times less risky than Ampco Pittsburgh. It trades about 0.21 of its potential returns per unit of risk. Ampco Pittsburgh is currently generating about 0.11 per unit of risk. If you would invest 18,106 in Carpenter Technology on March 28, 2025 and sell it today you would earn a total of 8,969 from holding Carpenter Technology or generate 49.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carpenter Technology vs. Ampco Pittsburgh
Performance |
| Timeline |
| Carpenter Technology |
| Ampco Pittsburgh |
Carpenter Technology and Ampco Pittsburgh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carpenter Technology and Ampco Pittsburgh
The main advantage of trading using opposite Carpenter Technology and Ampco Pittsburgh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carpenter Technology position performs unexpectedly, Ampco Pittsburgh 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 Ampco Pittsburgh will offset losses from the drop in Ampco Pittsburgh's long position.| Carpenter Technology vs. Worthington Industries | Carpenter Technology vs. Ryerson Holding Corp | Carpenter Technology vs. Mueller Industries | Carpenter Technology vs. Allegheny Technologies Incorporated |
| Ampco Pittsburgh vs. Northwest Pipe | Ampco Pittsburgh vs. Insteel Industries | Ampco Pittsburgh vs. Carpenter Technology | Ampco Pittsburgh vs. ESAB Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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