Correlation Between Clear Blue and CHAR Technologies
Can any of the company-specific risk be diversified away by investing in both Clear Blue and CHAR Technologies 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 Clear Blue and CHAR Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clear Blue Technologies and CHAR Technologies, you can compare the effects of market volatilities on Clear Blue and CHAR Technologies 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 Clear Blue with a short position of CHAR Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clear Blue and CHAR Technologies.
Diversification Opportunities for Clear Blue and CHAR Technologies
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clear and CHAR is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Clear Blue Technologies and CHAR Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHAR Technologies and Clear Blue 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 Clear Blue Technologies are associated (or correlated) with CHAR Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHAR Technologies has no effect on the direction of Clear Blue i.e., Clear Blue and CHAR Technologies go up and down completely randomly.
Pair Corralation between Clear Blue and CHAR Technologies
Assuming the 90 days trading horizon Clear Blue Technologies is expected to generate 2.79 times more return on investment than CHAR Technologies. However, Clear Blue is 2.79 times more volatile than CHAR Technologies. It trades about -0.01 of its potential returns per unit of risk. CHAR Technologies is currently generating about -0.08 per unit of risk. If you would invest 6.00 in Clear Blue Technologies on September 3, 2024 and sell it today you would lose (4.50) from holding Clear Blue Technologies or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clear Blue Technologies vs. CHAR Technologies
Performance |
| Timeline |
| Clear Blue Technologies |
| CHAR Technologies |
Clear Blue and CHAR Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clear Blue and CHAR Technologies
The main advantage of trading using opposite Clear Blue and CHAR Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clear Blue position performs unexpectedly, CHAR Technologies 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 CHAR Technologies will offset losses from the drop in CHAR Technologies' long position.| Clear Blue vs. Aurora Solar Technologies | Clear Blue vs. Environmental Waste International | Clear Blue vs. Lite Access Technologies | Clear Blue vs. Solar Alliance Energy |
| CHAR Technologies vs. Alaris Equity Partners | CHAR Technologies vs. Timbercreek Financial Corp | CHAR Technologies vs. Fiera Capital | CHAR Technologies vs. Diversified Royalty Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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