Correlation Between POLENERGIA and CN YANGTPWR
Can any of the company-specific risk be diversified away by investing in both POLENERGIA and CN YANGTPWR 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 POLENERGIA and CN YANGTPWR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POLENERGIA SA ZY and CN YANGTPWR GDR, you can compare the effects of market volatilities on POLENERGIA and CN YANGTPWR 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 POLENERGIA with a short position of CN YANGTPWR. Check out your portfolio center. Please also check ongoing floating volatility patterns of POLENERGIA and CN YANGTPWR.
Diversification Opportunities for POLENERGIA and CN YANGTPWR
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between POLENERGIA and CYZB is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding POLENERGIA SA ZY and CN YANGTPWR GDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN YANGTPWR GDR and POLENERGIA 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 POLENERGIA SA ZY are associated (or correlated) with CN YANGTPWR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN YANGTPWR GDR has no effect on the direction of POLENERGIA i.e., POLENERGIA and CN YANGTPWR go up and down completely randomly.
Pair Corralation between POLENERGIA and CN YANGTPWR
Assuming the 90 days horizon POLENERGIA SA ZY is expected to under-perform the CN YANGTPWR. In addition to that, POLENERGIA is 1.22 times more volatile than CN YANGTPWR GDR. It trades about -0.05 of its total potential returns per unit of risk. CN YANGTPWR GDR is currently generating about 0.01 per unit of volatility. If you would invest 3,340 in CN YANGTPWR GDR on September 15, 2024 and sell it today you would earn a total of 0.00 from holding CN YANGTPWR GDR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POLENERGIA SA ZY vs. CN YANGTPWR GDR
Performance |
| Timeline |
| POLENERGIA SA ZY |
| CN YANGTPWR GDR |
POLENERGIA and CN YANGTPWR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POLENERGIA and CN YANGTPWR
The main advantage of trading using opposite POLENERGIA and CN YANGTPWR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POLENERGIA position performs unexpectedly, CN YANGTPWR 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 CN YANGTPWR will offset losses from the drop in CN YANGTPWR's long position.| POLENERGIA vs. CN YANGTPWR GDR | POLENERGIA vs. SIEMENS ENERGY AG | POLENERGIA vs. Siemens Energy AG | POLENERGIA vs. Vistra Corp |
| CN YANGTPWR vs. SIEMENS ENERGY AG | CN YANGTPWR vs. Siemens Energy AG | CN YANGTPWR vs. Vistra Corp | CN YANGTPWR vs. CENTRICA ADR NEW |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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