Correlation Between CGN Power and Power Assets
Can any of the company-specific risk be diversified away by investing in both CGN Power and Power Assets 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 CGN Power and Power Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CGN Power Co and Power Assets Holdings, you can compare the effects of market volatilities on CGN Power and Power Assets 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 CGN Power with a short position of Power Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGN Power and Power Assets.
Diversification Opportunities for CGN Power and Power Assets
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CGN and Power is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CGN Power Co and Power Assets Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Assets Holdings and CGN Power 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 CGN Power Co are associated (or correlated) with Power Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Assets Holdings has no effect on the direction of CGN Power i.e., CGN Power and Power Assets go up and down completely randomly.
Pair Corralation between CGN Power and Power Assets
If you would invest 615.00 in Power Assets Holdings on September 25, 2024 and sell it today you would earn a total of 30.00 from holding Power Assets Holdings or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CGN Power Co vs. Power Assets Holdings
Performance |
| Timeline |
| CGN Power |
| Power Assets Holdings |
CGN Power and Power Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CGN Power and Power Assets
The main advantage of trading using opposite CGN Power and Power Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGN Power position performs unexpectedly, Power Assets 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 Power Assets will offset losses from the drop in Power Assets' long position.| CGN Power vs. Orsted AS | CGN Power vs. EDP Renovveis SA | CGN Power vs. Huaneng Power International | CGN Power vs. Power Assets Holdings |
| Power Assets vs. Orsted AS | Power Assets vs. EDP Renovveis SA | Power Assets vs. CGN Power Co | Power Assets vs. Huaneng Power International |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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