Correlation Between Carnegie Clean and Acrow
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and Acrow 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 Carnegie Clean and Acrow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnegie Clean Energy and Acrow Limited, you can compare the effects of market volatilities on Carnegie Clean and Acrow 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 Carnegie Clean with a short position of Acrow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and Acrow.
Diversification Opportunities for Carnegie Clean and Acrow
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Carnegie and Acrow is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Acrow Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acrow Limited and Carnegie 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 Carnegie Clean Energy are associated (or correlated) with Acrow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acrow Limited has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Acrow go up and down completely randomly.
Pair Corralation between Carnegie Clean and Acrow
Assuming the 90 days trading horizon Carnegie Clean is expected to generate 2.12 times less return on investment than Acrow. In addition to that, Carnegie Clean is 1.75 times more volatile than Acrow Limited. It trades about 0.01 of its total potential returns per unit of risk. Acrow Limited is currently generating about 0.04 per unit of volatility. If you would invest 108.00 in Acrow Limited on November 3, 2024 and sell it today you would earn a total of 8.00 from holding Acrow Limited or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnegie Clean Energy vs. Acrow Limited
Performance |
| Timeline |
| Carnegie Clean Energy |
| Acrow Limited |
Carnegie Clean and Acrow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and Acrow
The main advantage of trading using opposite Carnegie Clean and Acrow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean position performs unexpectedly, Acrow 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 Acrow will offset losses from the drop in Acrow's long position.| Carnegie Clean vs. FireFly Metals | Carnegie Clean vs. Liberty Financial Group | Carnegie Clean vs. Australian Strategic Materials | Carnegie Clean vs. Torque Metals |
| Acrow vs. Hotel Property Investments | Acrow vs. Perpetual Credit Income | Acrow vs. Australian Strategic Materials | Acrow vs. Finexia Financial Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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