Correlation Between Carnegie Clean and Nsx
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and Nsx 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 Nsx 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 Nsx, you can compare the effects of market volatilities on Carnegie Clean and Nsx 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 Nsx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and Nsx.
Diversification Opportunities for Carnegie Clean and Nsx
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carnegie and Nsx is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Nsx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nsx 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 Nsx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nsx has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Nsx go up and down completely randomly.
Pair Corralation between Carnegie Clean and Nsx
Assuming the 90 days trading horizon Carnegie Clean Energy is expected to generate 2.41 times more return on investment than Nsx. However, Carnegie Clean is 2.41 times more volatile than Nsx. It trades about 0.12 of its potential returns per unit of risk. Nsx is currently generating about -0.3 per unit of risk. If you would invest 3.50 in Carnegie Clean Energy on November 4, 2024 and sell it today you would earn a total of 0.40 from holding Carnegie Clean Energy or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Carnegie Clean Energy vs. Nsx
Performance |
| Timeline |
| Carnegie Clean Energy |
| Nsx |
Carnegie Clean and Nsx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and Nsx
The main advantage of trading using opposite Carnegie Clean and Nsx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean position performs unexpectedly, Nsx 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 Nsx will offset losses from the drop in Nsx's long position.| Carnegie Clean vs. Australian Unity Office | Carnegie Clean vs. Beam Communications Holdings | Carnegie Clean vs. Perseus Mining | Carnegie Clean vs. Stelar Metals |
| Nsx vs. WiseTech Global Limited | Nsx vs. Sports Entertainment Group | Nsx vs. 4Dmedical | Nsx vs. Dicker Data |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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