Correlation Between NEW MILLENNIUM and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both NEW MILLENNIUM and Carnegie Clean 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 NEW MILLENNIUM and Carnegie Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW MILLENNIUM IRON and Carnegie Clean Energy, you can compare the effects of market volatilities on NEW MILLENNIUM and Carnegie Clean 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 NEW MILLENNIUM with a short position of Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW MILLENNIUM and Carnegie Clean.
Diversification Opportunities for NEW MILLENNIUM and Carnegie Clean
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between NEW and Carnegie is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding NEW MILLENNIUM IRON and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy and NEW MILLENNIUM 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 NEW MILLENNIUM IRON are associated (or correlated) with Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of NEW MILLENNIUM i.e., NEW MILLENNIUM and Carnegie Clean go up and down completely randomly.
Pair Corralation between NEW MILLENNIUM and Carnegie Clean
Assuming the 90 days trading horizon NEW MILLENNIUM IRON is expected to under-perform the Carnegie Clean. But the stock apears to be less risky and, when comparing its historical volatility, NEW MILLENNIUM IRON is 2.91 times less risky than Carnegie Clean. The stock trades about -0.18 of its potential returns per unit of risk. The Carnegie Clean Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.04 in Carnegie Clean Energy on November 5, 2024 and sell it today you would earn a total of 0.06 from holding Carnegie Clean Energy or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW MILLENNIUM IRON vs. Carnegie Clean Energy
Performance |
| Timeline |
| NEW MILLENNIUM IRON |
| Carnegie Clean Energy |
NEW MILLENNIUM and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW MILLENNIUM and Carnegie Clean
The main advantage of trading using opposite NEW MILLENNIUM and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW MILLENNIUM position performs unexpectedly, Carnegie Clean 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 Carnegie Clean will offset losses from the drop in Carnegie Clean's long position.| NEW MILLENNIUM vs. Fevertree Drinks PLC | NEW MILLENNIUM vs. Delta Electronics Public | NEW MILLENNIUM vs. Cal Maine Foods | NEW MILLENNIUM vs. Nucletron Electronic Aktiengesellschaft |
| Carnegie Clean vs. Transport International Holdings | Carnegie Clean vs. NTG Nordic Transport | Carnegie Clean vs. Guidewire Software | Carnegie Clean vs. Kingdee International Software |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |