Correlation Between Carnegie Clean and Global Health
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and Global Health 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 Global Health 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 Global Health, you can compare the effects of market volatilities on Carnegie Clean and Global Health 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 Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and Global Health.
Diversification Opportunities for Carnegie Clean and Global Health
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Carnegie and Global is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health 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 Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Global Health go up and down completely randomly.
Pair Corralation between Carnegie Clean and Global Health
Assuming the 90 days trading horizon Carnegie Clean Energy is expected to generate 1.49 times more return on investment than Global Health. However, Carnegie Clean is 1.49 times more volatile than Global Health. It trades about 0.05 of its potential returns per unit of risk. Global Health is currently generating about 0.01 per unit of risk. If you would invest 3.80 in Carnegie Clean Energy on August 29, 2024 and sell it today you would earn a total of 0.10 from holding Carnegie Clean Energy or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnegie Clean Energy vs. Global Health
Performance |
| Timeline |
| Carnegie Clean Energy |
| Global Health |
Carnegie Clean and Global Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and Global Health
The main advantage of trading using opposite Carnegie Clean and Global Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean position performs unexpectedly, Global Health 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 Global Health will offset losses from the drop in Global Health's long position.| Carnegie Clean vs. Green Technology Metals | Carnegie Clean vs. Advanced Braking Technology | Carnegie Clean vs. Land Homes Group | Carnegie Clean vs. Bailador Technology Invest |
| Global Health vs. Westpac Banking | Global Health vs. Champion Iron | Global Health vs. Ridley | Global Health vs. Peel Mining |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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