Correlation Between Clean Carbon and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both Clean Carbon and KGHM Polska 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 Clean Carbon and KGHM Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Carbon Energy and KGHM Polska Miedz, you can compare the effects of market volatilities on Clean Carbon and KGHM Polska 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 Clean Carbon with a short position of KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Carbon and KGHM Polska.
Diversification Opportunities for Clean Carbon and KGHM Polska
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Clean and KGHM is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Clean Carbon Energy and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz and Clean Carbon 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 Clean Carbon Energy are associated (or correlated) with KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of Clean Carbon i.e., Clean Carbon and KGHM Polska go up and down completely randomly.
Pair Corralation between Clean Carbon and KGHM Polska
Assuming the 90 days trading horizon Clean Carbon Energy is expected to generate 2.47 times more return on investment than KGHM Polska. However, Clean Carbon is 2.47 times more volatile than KGHM Polska Miedz. It trades about 0.03 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about 0.01 per unit of risk. If you would invest 43.00 in Clean Carbon Energy on November 1, 2024 and sell it today you would lose (3.00) from holding Clean Carbon Energy or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Clean Carbon Energy vs. KGHM Polska Miedz
Performance |
| Timeline |
| Clean Carbon Energy |
| KGHM Polska Miedz |
Clean Carbon and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Carbon and KGHM Polska
The main advantage of trading using opposite Clean Carbon and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Carbon position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.| Clean Carbon vs. Enter Air SA | Clean Carbon vs. Play2Chill SA | Clean Carbon vs. GreenX Metals | Clean Carbon vs. Noble Financials SA |
| KGHM Polska vs. LSI Software SA | KGHM Polska vs. Play2Chill SA | KGHM Polska vs. SOFTWARE MANSION SPOLKA | KGHM Polska vs. New Tech Venture |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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