CARR vs TT: Stock Returns, Risk & Volatility (2026)

Q: Which is a better investment: CARR or TT?

Over the past year, TT looks like the better investment: it had higher total return (TT +35.3% vs CARR +6.4%) and a higher Sharpe ratio (TT 1.09 vs CARR 0.23). On risk, TT was less volatile (TT 27.9% vs CARR 33.4%), TT had a smaller max drawdown (TT -20.0% vs CARR -37.4%), and TT had less severe losses on the worst 5% of days (Expected Shortfall of TT -4.03% vs CARR -4.71%).

Written by Gale Finance Team

Reviewed by Sid Kalla CFA Charterholder

Quick answer

Which is a better investment: CARR or TT?

Over the past year, TT outperformed (+6.4% vs +35.3%) with a Sharpe ratio of 1.09.

Total Return

CARR +6.4%

TT WIN +35.3%

Sharpe Ratio

CARR 0.23

TT WIN 1.09

Annualized Volatility

CARR 33.4%

TT WIN 27.9%

Max Drawdown

CARR -37.4%

TT WIN -20.0%

Analysis period: 2025-04-14 to 2026-04-10

CARR Total Return

↑ +6.4%

TT Total Return

↑ +35.3%

Relative Performance of CARR vs TT (Normalized to 100)

CARR TT

Normalized to 100 at start date for comparison

Key Takeaways

Total Return: CARR delivered a +6.4% total return, while TT returned +35.3% over the same period. TT outperformed on total returns.
Risk-Adjusted Return (Sharpe Ratio): TT had a higher Sharpe (1.09 vs 0.23), indicating better risk-adjusted performance.
Volatility (Annualized): CARR was more volatile, with 33.4% annualized volatility, versus 27.9% for TT.
Maximum Drawdown: TT's maximum drawdown was -20.0%, while CARR experienced a deeper drawdown of -37.4%.
Tail Risk (VaR & Expected Shortfall): At the 5% level (daily log returns), CARR's VaR was -3.18% and its Expected Shortfall (CVaR) was -4.71%; TT's were -2.77% and -4.03%. VaR is the cutoff; Expected Shortfall is the average move on the worst days.
Skew & Kurtosis: Skew: CARR -0.17 vs TT -0.11. Excess kurtosis: CARR 5.95 vs TT 5.38. Negative skew leans downside; higher excess kurtosis means fatter tails.
Tail Days & Extremes: 2σ tail days (down/up): CARR 5/5, TT 7/5. Worst day: CARR -10.61% (2025-07-29) vs TT -8.40% (2025-07-30). Best day: CARR +11.61% (2025-05-01) vs TT +8.45% (2025-04-30).
Risk ratios: Sortino - CARR: 0.33 vs. TT: 1.62 , Calmar - CARR: 0.17 vs. TT: 1.79 , Sterling - CARR: 0.06 vs. TT: 1.84 , Treynor - CARR: 0.06 vs. TT: 0.29 , Ulcer Index - CARR: 22.93% vs. TT: 9.99%

Carrier Global vs Trane Technologies Correlation

0.56 Average Correlation

Carrier Global and Trane Technologies are moderately correlated over the past year. With a correlation of 0.56, these assets show moderate co-movement, offering some diversification when held together.

For portfolio construction, this moderate correlation offers some diversification benefit, though the assets still tend to move together during major market moves.

Metric	Value
Current (30-day)	0.82
Average (full period)	0.56
Minimum	0.27
Maximum	0.82

Correlation measures how closely two assets move together. Values near +1 indicate strong co-movement, near 0 indicates independence, and negative values indicate inverse movement.

Investment Comparison

If you invested $10,000 in each asset on April 14, 2025:

CARR $10,635.25 +6.4%

TT $13,527 +35.3%

Difference: $2,891.75 (TT ahead)

Carrier Global and Trane Technologies: Risk Analysis

Carrier Global experienced its maximum drawdown of -37.4% from 2025-07-25 to 2025-11-20. It has not yet recovered to its previous peak.

Trane Technologies experienced its maximum drawdown of -20% from 2025-07-28 to 2026-01-07. It took 35 days to recover.

Smaller drawdowns and faster recoveries indicate lower downside risk and greater resilience during market stress.

Sharpe Ratio of CARR and TT

CARR Sharpe Ratio

↑ 0.23

TT Sharpe Ratio

↑ 1.09

Sharpe ratio measures return per unit of risk (volatility). A higher Sharpe indicates better risk-adjusted performance. TT had a higher Sharpe (1.09 vs 0.23), indicating better risk-adjusted performance.

A Sharpe above 1.0 is generally considered good, above 2.0 is excellent. Negative Sharpe means the asset underperformed the risk-free rate. Calculated on each asset's full 365-day lookback of available prices and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).

Sortino Ratio of CARR and TT

CARR Sortino Ratio

↑ 0.33

TT Sortino Ratio

↑ 1.62

Sortino ratio measures return per unit of downside risk. Unlike Sharpe, it only counts downside deviation (returns below the target return). TT had better downside-adjusted returns.

A higher Sortino is better. It's useful when upside volatility is common (crypto is the obvious example). Downside deviation: CARR 23.1% vs TT 18.8%. Calculated on each asset's full 365-day lookback of available prices, using the daily risk-free rate as the target return, and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).

Calmar Ratio of CARR and TT

CARR Calmar Ratio

↑ 0.17

TT Calmar Ratio

↑ 1.79

Calmar ratio compares CAGR to maximum drawdown. Higher Calmar means more return per unit of worst drawdown. TT posted the higher Calmar ratio.

Calmar is computed on each asset's full 365-day lookback and uses the max drawdown over that same window.

Sterling Ratio of CARR and TT

CARR Sterling Ratio

↑ 0.06

TT Sterling Ratio

↑ 1.84

Sterling ratio measures excess return per unit of average drawdown (typically drawdowns worse than 10%). TT posted the higher Sterling ratio.

Sterling uses average drawdown events deeper than 10% and subtracts the risk-free rate to report excess return.

Treynor Ratio of CARR and TT

CARR Treynor Ratio

↑ 0.06

TT Treynor Ratio

↑ 0.29

Treynor ratio measures excess return per unit of market risk (beta) instead of total volatility. TT posted the higher Treynor ratio.

Treynor uses beta vs the S&P 500 (SPY) on shared dates and the average 3-month Treasury rate as the risk-free rate.

Ulcer Index of CARR and TT

CARR Ulcer Index

22.93%

TT Ulcer Index

9.99%

Ulcer Index captures drawdown depth and duration. Lower Ulcer Index means less drawdown pain. TT had the lower Ulcer Index (less drawdown pain).

Ulcer Index is computed from each asset's drawdown series over the full lookback window.

Tail Risk & Distribution Shape (1-Year): Carrier Global vs. Trane Technologies

This section looks at the shape of daily returns, not just the average. Tail stats are computed per asset on its own daily series (crypto includes weekends). We use daily log returns $\ln\left(\frac{P_t}{P_{t-1}}\right)$ so multi-day moves add cleanly.

Definitions: Value at Risk (VaR), Expected Shortfall, skew, kurtosis, and fat tails.

Metric (1-Year)	CARR	TT
5% VaR (daily log return)	-3.18%	-2.77%
5% Expected Shortfall (CVaR)	-4.71% (worst 13 days)	-4.03% (worst 13 days)
Skew	-0.17	-0.11
Excess kurtosis	5.95	5.38
2σ tail days (down / up)	5 / 5	7 / 5
Worst day	-10.61% (2025-07-29)	-8.40% (2025-07-30)
Best day	+11.61% (2025-05-01)	+8.45% (2025-04-30)

Downside co-moves (2σ) — 1-Year

Computed on shared dates only (n=248). A “2σ downside move” means a shared-close log return more than 2 standard deviations below that asset’s own mean on this shared-date series. Dates below show simple returns (%) for readability.

When TT has a big down day, CARR also does

57.1%

4 / 7 days

When CARR has a big down day, TT also does

80.0%

4 / 5 days

Show downside tail dates

Dates below are shared-date observations. The “Date” is the period end (close). Tail thresholds are computed on log returns, but the table shows simple returns (%) for readability. Returns are computed from the previous shared close to this one (for example, Friday → Monday includes weekend moves).

Days when both CARR and TT had a big down day (2σ)

Date (interval)	CARR	TT
2025-07-30	-4.84%	-8.40%
2025-10-22	-5.15%	-3.70%
2026-03-03	-4.18%	-4.36%
2026-03-26	-7.73%	-6.19%

Days when CARR had a big down day

Date (interval)	CARR	TT
2025-07-29	-10.61%	-0.33%
2025-07-30	-4.84%	-8.40%
2025-10-22	-5.15%	-3.70%
2026-03-03	-4.18%	-4.36%
2026-03-26	-7.73%	-6.19%

Days when TT had a big down day

Date (interval)	CARR	TT
2025-04-16	-2.12%	-3.87%
2025-07-30	-4.84%	-8.40%
2025-09-12	-1.01%	-3.40%
2025-10-22	-5.15%	-3.70%
2025-12-17	-1.95%	-3.45%
2026-03-03	-4.18%	-4.36%
2026-03-26	-7.73%	-6.19%

Read this as “how ugly the ugly days get”, not as a precise forecast. One-year samples are small, so tail estimates are inherently noisy.

Carrier Global vs Trane Technologies Volatility (CARR vs TT)

CARR Volatility

33.4%

±2.11% daily

TT Volatility

27.9%

±1.76% daily

Typical daily swing

CARR

±2.11%

±1.76%

Carrier Global's annualized volatility of 33.4% means it typically moves ±2.11% on any given day.

Trane Technologies's annualized volatility of 27.9% means it typically moves ±1.76% on any given day.

CARR's higher volatility means a wider path to returns — this can be attractive for tactical, shorter-term exposure, while TT's smoother profile may better suit long-term allocators seeking steadier growth.

For comparison, the S&P 500 typically has 15-18% annualized volatility, translating to roughly ±1% daily moves. Higher volatility means larger potential gains but also larger potential losses.

Carrier Global vs Trane Technologies Performance Over Time

Metric	CARR	TT
30 Days	7.9%	7.7%
90 Days	13.1%	22.3%
180 Days	12.7%	13%
1 Year	6.4%	35.3%

Shorter time frames can show different leaders as market conditions change. Consider your investment horizon when comparing performance.

Full Comparison of Carrier Global vs. Trane Technologies (1-Year)

Metric	CARR	TT
Total Return	+6.4%	+35.3%
Annualized Volatility	33.4%	27.9%
Sharpe Ratio	0.23	1.09
Sortino Ratio	0.33	1.62
Calmar Ratio	0.17	1.79
Sterling Ratio	0.06	1.84
Treynor Ratio	0.06	0.29
Ulcer Index	22.93%	9.99%
Max Drawdown	-37.4%	-20.0%
Avg Correlation to S&P 500	0.45	0.40
5% VaR (daily log return)	-3.18%	-2.77%
5% Expected Shortfall (CVaR)	-4.71%	-4.03%
Skew	-0.17	-0.11
Excess kurtosis	5.95	5.38
2σ tail days (down / up)	5 / 5	7 / 5

Audit this calculation

Formulas, inputs, and conventions used to compute the metrics on this page.

Inputs & conventions

Shared window for pair metrics: 2025-04-14 → 2026-04-10 (last shared close).
Rolling correlation sample (shared closes): 219 rolling 30-day values (from 248 shared daily returns).
Annualization (days/year): CARR: 252 days/year; TT: 252 days/year.
Risk-free rate: Uses the 3-month U.S. Treasury yield (FRED: DGS3MO), averaged over each asset’s window:

CARR: 4.17% over 2025-04-14 → 2026-04-10.

TT: 4.17% over 2025-04-14 → 2026-04-10.
Volatility drag (rule of thumb): Estimated from annualized volatility (simple returns). For the log-return framing, see Log returns.

CARR: ≈ -5.6%/yr

TT: ≈ -3.9%/yr
Data alignment: No forward fill. Correlation and tail co-moves are computed on shared closes only.
For cross-calendar pairs (e.g., crypto vs stocks), weekend/holiday moves roll into the next shared close.
Return conventions: Volatility/Sharpe/Sortino use simple daily returns. Tail-risk uses daily log returns for distribution stats (but tables show simple returns). Log returns.

Formulas

Daily simple return

r_t = \frac{P_t}{P_{t-1}} - 1

Volatility

\sigma_{ann} = \sigma(r_t)\sqrt{A}

Volatility drag (approx.)

\text{drag} \approx \tfrac{1}{2}\sigma_{ann}^2

Sharpe Ratio

S = \frac{A\,\bar{r} - r_f}{\sigma(r_t)\sqrt{A}}

Sortino Ratio

So = \frac{A\,\bar{r} - r_f}{\sqrt{\mathbb{E}[\min(0,\,r_t - r_f/A)^2]}\,\sqrt{A}}

Maximum Drawdown

MDD = \min_t\left(\frac{P_t}{\max_{s \le t} P_s} - 1\right)

Average Correlation

\rho = \frac{\operatorname{cov}(r^A,\,r^B)}{\sigma_A\,\sigma_B}

Log returns

\ell_t = \ln\left(\frac{P_t}{P_{t-1}}\right)

Notation

$P_t$: Price on day t.
$r_t$: Simple daily return.
$\ell_t$: Log daily return.
$\bar{r}$: Average daily return.
$\sigma(r_t)$: Standard deviation of daily returns.
$A$: Annualization factor (days/year).
$r_f$: Annual risk-free rate.

Carrier Global vs Trane Technologies: Frequently Asked Questions

Which has higher volatility: CARR or TT?

CARR showed higher volatility at 33.4% annualized, compared to 27.9% for TT Over the past year. Higher volatility means larger price swings in both directions.

Does CARR provide diversification when held with TT?

CARR and TT are moderately correlated over the past year, with an average correlation of 0.56. This offers some diversification benefit, though they still tend to move together during major market moves.

How bad are the worst 5% days for CARR vs TT?

Over the past year, CARR's 5% VaR was -3.18% and its 5% Expected Shortfall was -4.71% (worst 13 days). TT's were -2.77% and -4.03% (worst 13 days).

Do CARR and TT crash together on bad days?

On shared dates (n=248), when TT has a 2σ down day, CARR also does 57.1% (4/7 days). In the other direction, when CARR has one, TT also does 80.0% (4/5 days).

Which has better risk-adjusted returns: CARR or TT?

TT showed better risk-adjusted performance with a Sharpe ratio of 1.09 versus CARR's 0.23 Over the past year.

Can CARR and TT be combined in a portfolio?

Yes, though allocation sizing matters. Their moderate correlation offers some diversification benefits. CARR's higher volatility (33.4%) means even small allocations can materially impact overall portfolio risk.

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