Correlation Between Carnegie Clean and Latitude Financial
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and Latitude Financial 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 Latitude Financial 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 Latitude Financial Services, you can compare the effects of market volatilities on Carnegie Clean and Latitude Financial 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 Latitude Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and Latitude Financial.
Diversification Opportunities for Carnegie Clean and Latitude Financial
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Carnegie and Latitude is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Latitude Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latitude Financial 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 Latitude Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latitude Financial has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Latitude Financial go up and down completely randomly.
Pair Corralation between Carnegie Clean and Latitude Financial
Assuming the 90 days trading horizon Carnegie Clean Energy is expected to under-perform the Latitude Financial. In addition to that, Carnegie Clean is 4.81 times more volatile than Latitude Financial Services. It trades about -0.01 of its total potential returns per unit of risk. Latitude Financial Services is currently generating about -0.01 per unit of volatility. If you would invest 116.00 in Latitude Financial Services on October 18, 2024 and sell it today you would lose (1.00) from holding Latitude Financial Services or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnegie Clean Energy vs. Latitude Financial Services
Performance |
| Timeline |
| Carnegie Clean Energy |
| Latitude Financial |
Carnegie Clean and Latitude Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and Latitude Financial
The main advantage of trading using opposite Carnegie Clean and Latitude Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean position performs unexpectedly, Latitude Financial 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 Latitude Financial will offset losses from the drop in Latitude Financial's long position.| Carnegie Clean vs. ACDC Metals | Carnegie Clean vs. DY6 Metals | Carnegie Clean vs. Autosports Group | Carnegie Clean vs. Stelar Metals |
| Latitude Financial vs. Djerriwarrh Investments | Latitude Financial vs. MFF Capital Investments | Latitude Financial vs. Pinnacle Investment Management | Latitude Financial vs. Carnegie Clean Energy |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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