Correlation Between Cleanaway and Century Wind
Can any of the company-specific risk be diversified away by investing in both Cleanaway and Century Wind 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 Cleanaway and Century Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleanaway Co and Century Wind Power, you can compare the effects of market volatilities on Cleanaway and Century Wind 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 Cleanaway with a short position of Century Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleanaway and Century Wind.
Diversification Opportunities for Cleanaway and Century Wind
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cleanaway and Century is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Co and Century Wind Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Wind Power and Cleanaway 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 Cleanaway Co are associated (or correlated) with Century Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Wind Power has no effect on the direction of Cleanaway i.e., Cleanaway and Century Wind go up and down completely randomly.
Pair Corralation between Cleanaway and Century Wind
Assuming the 90 days trading horizon Cleanaway is expected to generate 11.8 times less return on investment than Century Wind. But when comparing it to its historical volatility, Cleanaway Co is 3.28 times less risky than Century Wind. It trades about 0.01 of its potential returns per unit of risk. Century Wind Power is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 27,107 in Century Wind Power on September 4, 2024 and sell it today you would earn a total of 2,993 from holding Century Wind Power or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cleanaway Co vs. Century Wind Power
Performance |
| Timeline |
| Cleanaway |
| Century Wind Power |
Cleanaway and Century Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleanaway and Century Wind
The main advantage of trading using opposite Cleanaway and Century Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway position performs unexpectedly, Century Wind 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 Century Wind will offset losses from the drop in Century Wind's long position.| Cleanaway vs. Universal Microelectronics Co | Cleanaway vs. AVerMedia Technologies | Cleanaway vs. Symtek Automation Asia | Cleanaway vs. WiseChip Semiconductor |
| Century Wind vs. Cleanaway Co | Century Wind vs. Simple Mart Retail | Century Wind vs. WINSON Machinery Co | Century Wind vs. ReaLy Development Construction |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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