Correlation Between Absolute Clean and Country Group
Can any of the company-specific risk be diversified away by investing in both Absolute Clean and Country Group 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 Absolute Clean and Country Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Clean Energy and Country Group Holdings, you can compare the effects of market volatilities on Absolute Clean and Country Group 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 Absolute Clean with a short position of Country Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Clean and Country Group.
Diversification Opportunities for Absolute Clean and Country Group
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Absolute and Country is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Clean Energy and Country Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Group Holdings and Absolute Clean 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 Absolute Clean Energy are associated (or correlated) with Country Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Group Holdings has no effect on the direction of Absolute Clean i.e., Absolute Clean and Country Group go up and down completely randomly.
Pair Corralation between Absolute Clean and Country Group
Assuming the 90 days trading horizon Absolute Clean is expected to generate 1.09 times less return on investment than Country Group. But when comparing it to its historical volatility, Absolute Clean Energy is 1.0 times less risky than Country Group. It trades about 0.04 of its potential returns per unit of risk. Country Group Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 66.00 in Country Group Holdings on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Country Group Holdings or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Clean Energy vs. Country Group Holdings
Performance |
| Timeline |
| Absolute Clean Energy |
| Country Group Holdings |
Absolute Clean and Country Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Clean and Country Group
The main advantage of trading using opposite Absolute Clean and Country Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Clean position performs unexpectedly, Country Group 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 Country Group will offset losses from the drop in Country Group's long position.| Absolute Clean vs. BCPG Public | Absolute Clean vs. Energy Absolute Public | Absolute Clean vs. Gunkul Engineering Public | Absolute Clean vs. Gulf Energy Development |
| Country Group vs. Asia Plus Group | Country Group vs. Globlex Holding Management | Country Group vs. Asia Green Energy | Country Group vs. Amanah Leasing Public |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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