Correlation Between CurrentC Power and BASE
Can any of the company-specific risk be diversified away by investing in both CurrentC Power and BASE 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 CurrentC Power and BASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CurrentC Power and BASE Inc, you can compare the effects of market volatilities on CurrentC Power and BASE 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 CurrentC Power with a short position of BASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CurrentC Power and BASE.
Diversification Opportunities for CurrentC Power and BASE
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CurrentC and BASE is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding CurrentC Power and BASE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASE Inc and CurrentC 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 CurrentC Power are associated (or correlated) with BASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASE Inc has no effect on the direction of CurrentC Power i.e., CurrentC Power and BASE go up and down completely randomly.
Pair Corralation between CurrentC Power and BASE
Given the investment horizon of 90 days CurrentC Power is expected to generate 7.07 times more return on investment than BASE. However, CurrentC Power is 7.07 times more volatile than BASE Inc. It trades about 0.21 of its potential returns per unit of risk. BASE Inc is currently generating about 0.4 per unit of risk. If you would invest 12.00 in CurrentC Power on August 24, 2024 and sell it today you would earn a total of 11.00 from holding CurrentC Power or generate 91.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CurrentC Power vs. BASE Inc
Performance |
| Timeline |
| CurrentC Power |
| BASE Inc |
CurrentC Power and BASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CurrentC Power and BASE
The main advantage of trading using opposite CurrentC Power and BASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CurrentC Power position performs unexpectedly, BASE 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 BASE will offset losses from the drop in BASE's long position.| CurrentC Power vs. Zhihu Inc ADR | CurrentC Power vs. Postal Realty Trust | CurrentC Power vs. Nike Inc | CurrentC Power vs. Eastern Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |