Correlation Between PLAYMATES TOYS and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS 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 PLAYMATES TOYS and Carnegie Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and Carnegie Clean Energy, you can compare the effects of market volatilities on PLAYMATES TOYS 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 PLAYMATES TOYS with a short position of Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and Carnegie Clean.
Diversification Opportunities for PLAYMATES TOYS and Carnegie Clean
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between PLAYMATES and Carnegie is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS 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 PLAYMATES TOYS 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 PLAYMATES TOYS 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 PLAYMATES TOYS i.e., PLAYMATES TOYS and Carnegie Clean go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and Carnegie Clean
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to generate 0.99 times more return on investment than Carnegie Clean. However, PLAYMATES TOYS is 1.01 times less risky than Carnegie Clean. It trades about 0.25 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about -0.03 per unit of risk. If you would invest 6.40 in PLAYMATES TOYS on September 29, 2024 and sell it today you would earn a total of 0.75 from holding PLAYMATES TOYS or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYMATES TOYS vs. Carnegie Clean Energy
Performance |
| Timeline |
| PLAYMATES TOYS |
| Carnegie Clean Energy |
PLAYMATES TOYS and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and Carnegie Clean
The main advantage of trading using opposite PLAYMATES TOYS and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS 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.The idea behind PLAYMATES TOYS and Carnegie Clean Energy 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.| Carnegie Clean vs. Orsted AS | Carnegie Clean vs. EDP Renovveis SA | Carnegie Clean vs. Huaneng Power International | Carnegie Clean vs. Power Assets Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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