Correlation Between AAON and Carlisle Companies

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

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

Diversification Opportunities for AAON and Carlisle Companies

0.25

Correlation Coefficient

AAON  Carlisle Companies

Modest diversification

The 3 months correlation between AAON and Carlisle is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding AAON Inc and Carlisle Companies Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlisle Companies and AAON 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 AAON Inc 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 AAON i.e., AAON and Carlisle Companies go up and down completely randomly.

Pair Corralation between AAON and Carlisle Companies

Given the investment horizon of 90 days AAON Inc is expected to under-perform the Carlisle Companies. In addition to that, AAON is 1.9 times more volatile than Carlisle Companies Incorporated. It trades about -0.04 of its total potential returns per unit of risk. Carlisle Companies Incorporated is currently generating about 0.13 per unit of volatility. If you would invest  37,408  in Carlisle Companies Incorporated on April 25, 2025 and sell it today you would earn a total of  5,038  from holding Carlisle Companies Incorporated or generate 13.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AAON Inc  vs.  Carlisle Companies Incorporate

AAON Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days AAON Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Carlisle Companies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlisle Companies Incorporated are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Carlisle Companies disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AAON and Carlisle Companies

The main advantage of trading using opposite AAON and Carlisle Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAON 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 AAON Inc 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.