Correlation Between Century Wind and Celxpert Energy
Can any of the company-specific risk be diversified away by investing in both Century Wind and Celxpert Energy 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 Century Wind and Celxpert Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Wind Power and Celxpert Energy, you can compare the effects of market volatilities on Century Wind and Celxpert Energy 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 Century Wind with a short position of Celxpert Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Wind and Celxpert Energy.
Diversification Opportunities for Century Wind and Celxpert Energy
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Century and Celxpert is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Century Wind Power and Celxpert Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celxpert Energy and Century Wind 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 Century Wind Power are associated (or correlated) with Celxpert Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celxpert Energy has no effect on the direction of Century Wind i.e., Century Wind and Celxpert Energy go up and down completely randomly.
Pair Corralation between Century Wind and Celxpert Energy
Assuming the 90 days trading horizon Century Wind is expected to generate 13.89 times less return on investment than Celxpert Energy. But when comparing it to its historical volatility, Century Wind Power is 7.83 times less risky than Celxpert Energy. It trades about 0.15 of its potential returns per unit of risk. Celxpert Energy is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,530 in Celxpert Energy on September 12, 2024 and sell it today you would earn a total of 1,070 from holding Celxpert Energy or generate 42.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Wind Power vs. Celxpert Energy
Performance |
| Timeline |
| Century Wind Power |
| Celxpert Energy |
Century Wind and Celxpert Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Wind and Celxpert Energy
The main advantage of trading using opposite Century Wind and Celxpert Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Wind position performs unexpectedly, Celxpert Energy 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 Celxpert Energy will offset losses from the drop in Celxpert Energy's long position.| Century Wind vs. Great Computer | Century Wind vs. RiTdisplay Corp | Century Wind vs. U Tech Media Corp | Century Wind vs. Pili International Multimedia |
| Celxpert Energy vs. China Metal Products | Celxpert Energy vs. Phytohealth Corp | Celxpert Energy vs. C Media Electronics | Celxpert Energy vs. Formosa Chemicals Fibre |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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