Correlation Between Abak SA and Clean Carbon
Can any of the company-specific risk be diversified away by investing in both Abak SA and Clean Carbon 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 Abak SA and Clean Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abak SA and Clean Carbon Energy, you can compare the effects of market volatilities on Abak SA and Clean Carbon 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 Abak SA with a short position of Clean Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abak SA and Clean Carbon.
Diversification Opportunities for Abak SA and Clean Carbon
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Abak and Clean is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Abak SA and Clean Carbon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Carbon Energy and Abak SA 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 Abak SA are associated (or correlated) with Clean Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Carbon Energy has no effect on the direction of Abak SA i.e., Abak SA and Clean Carbon go up and down completely randomly.
Pair Corralation between Abak SA and Clean Carbon
Assuming the 90 days trading horizon Abak SA is expected to under-perform the Clean Carbon. In addition to that, Abak SA is 1.1 times more volatile than Clean Carbon Energy. It trades about -0.12 of its total potential returns per unit of risk. Clean Carbon Energy is currently generating about 0.25 per unit of volatility. If you would invest 25.00 in Clean Carbon Energy on October 26, 2024 and sell it today you would earn a total of 6.00 from holding Clean Carbon Energy or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 64.71% |
| Values | Daily Returns |
Abak SA vs. Clean Carbon Energy
Performance |
| Timeline |
| Abak SA |
| Clean Carbon Energy |
Abak SA and Clean Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abak SA and Clean Carbon
The main advantage of trading using opposite Abak SA and Clean Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abak SA position performs unexpectedly, Clean Carbon 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 Clean Carbon will offset losses from the drop in Clean Carbon's long position.| Abak SA vs. Investment Friends Capital | Abak SA vs. PLAYWAY SA | Abak SA vs. Santander Bank Polska | Abak SA vs. Medicalg |
| Clean Carbon vs. BNP Paribas Bank | Clean Carbon vs. Skyline Investment SA | Clean Carbon vs. Investment Friends Capital | Clean Carbon vs. Echo Investment SA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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