Correlation Between Carnegie Clean and Viva Leisure
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and Viva Leisure 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 Viva Leisure 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 Viva Leisure, you can compare the effects of market volatilities on Carnegie Clean and Viva Leisure 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 Viva Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and Viva Leisure.
Diversification Opportunities for Carnegie Clean and Viva Leisure
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Carnegie and Viva is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Viva Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Leisure 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 Viva Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Leisure has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Viva Leisure go up and down completely randomly.
Pair Corralation between Carnegie Clean and Viva Leisure
Assuming the 90 days trading horizon Carnegie Clean Energy is expected to generate 10.78 times more return on investment than Viva Leisure. However, Carnegie Clean is 10.78 times more volatile than Viva Leisure. It trades about 0.08 of its potential returns per unit of risk. Viva Leisure is currently generating about 0.03 per unit of risk. If you would invest 7.50 in Carnegie Clean Energy on August 29, 2024 and sell it today you would lose (3.60) from holding Carnegie Clean Energy or give up 48.0% 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. Viva Leisure
Performance |
| Timeline |
| Carnegie Clean Energy |
| Viva Leisure |
Carnegie Clean and Viva Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and Viva Leisure
The main advantage of trading using opposite Carnegie Clean and Viva Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean position performs unexpectedly, Viva Leisure 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 Viva Leisure will offset losses from the drop in Viva Leisure's long position.| Carnegie Clean vs. Bank of Queensland | Carnegie Clean vs. Wt Financial Group | Carnegie Clean vs. Cleanaway Waste Management | Carnegie Clean vs. Platinum Asset Management |
| Viva Leisure vs. Summit Resources Limited | Viva Leisure vs. Ecofibre | Viva Leisure vs. iShares Global Healthcare | Viva Leisure vs. Adriatic Metals Plc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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