Correlation Between BROADWIND ENRGY and CSL
Can any of the company-specific risk be diversified away by investing in both BROADWIND ENRGY and CSL 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 BROADWIND ENRGY and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADWIND ENRGY and CSL Limited, you can compare the effects of market volatilities on BROADWIND ENRGY and CSL 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 BROADWIND ENRGY with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADWIND ENRGY and CSL.
Diversification Opportunities for BROADWIND ENRGY and CSL
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BROADWIND and CSL is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BROADWIND ENRGY and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited and BROADWIND ENRGY 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 BROADWIND ENRGY are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of BROADWIND ENRGY i.e., BROADWIND ENRGY and CSL go up and down completely randomly.
Pair Corralation between BROADWIND ENRGY and CSL
Assuming the 90 days trading horizon BROADWIND ENRGY is expected to generate 3.44 times more return on investment than CSL. However, BROADWIND ENRGY is 3.44 times more volatile than CSL Limited. It trades about 0.0 of its potential returns per unit of risk. CSL Limited is currently generating about -0.09 per unit of risk. If you would invest 172.00 in BROADWIND ENRGY on September 12, 2024 and sell it today you would lose (4.00) from holding BROADWIND ENRGY or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BROADWIND ENRGY vs. CSL Limited
Performance |
| Timeline |
| BROADWIND ENRGY |
| CSL Limited |
BROADWIND ENRGY and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADWIND ENRGY and CSL
The main advantage of trading using opposite BROADWIND ENRGY and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADWIND ENRGY position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc |
| CSL vs. ARDAGH METAL PACDL 0001 | CSL vs. FUYO GENERAL LEASE | CSL vs. LION ONE METALS | CSL vs. Lion One Metals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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