Correlation Between Power Wind and Cleanaway
Can any of the company-specific risk be diversified away by investing in both Power Wind and Cleanaway 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 Power Wind and Cleanaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Wind Health and Cleanaway Co, you can compare the effects of market volatilities on Power Wind and Cleanaway 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 Power Wind with a short position of Cleanaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Wind and Cleanaway.
Diversification Opportunities for Power Wind and Cleanaway
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Power and Cleanaway is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Power Wind Health and Cleanaway Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleanaway and Power 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 Power Wind Health are associated (or correlated) with Cleanaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleanaway has no effect on the direction of Power Wind i.e., Power Wind and Cleanaway go up and down completely randomly.
Pair Corralation between Power Wind and Cleanaway
Assuming the 90 days trading horizon Power Wind Health is expected to under-perform the Cleanaway. In addition to that, Power Wind is 2.74 times more volatile than Cleanaway Co. It trades about -0.16 of its total potential returns per unit of risk. Cleanaway Co is currently generating about -0.12 per unit of volatility. If you would invest 18,300 in Cleanaway Co on September 1, 2024 and sell it today you would lose (150.00) from holding Cleanaway Co or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Wind Health vs. Cleanaway Co
Performance |
| Timeline |
| Power Wind Health |
| Cleanaway |
Power Wind and Cleanaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Wind and Cleanaway
The main advantage of trading using opposite Power Wind and Cleanaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Wind position performs unexpectedly, Cleanaway 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 Cleanaway will offset losses from the drop in Cleanaway's long position.| Power Wind vs. Sunny Friend Environmental | Power Wind vs. Cleanaway Co | Power Wind vs. Charoen Pokphand Enterprise | Power Wind vs. TTET Union Corp |
| Cleanaway vs. BES Engineering Co | Cleanaway vs. Continental Holdings Corp | Cleanaway vs. Kee Tai Properties | Cleanaway vs. Hung Sheng 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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