Correlation Between Clean Carbon and PCF Group
Can any of the company-specific risk be diversified away by investing in both Clean Carbon and PCF Group 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 PCF Group 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 PCF Group SA, you can compare the effects of market volatilities on Clean Carbon and PCF Group 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 PCF Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Carbon and PCF Group.
Diversification Opportunities for Clean Carbon and PCF Group
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clean and PCF is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Clean Carbon Energy and PCF Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCF Group SA 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 PCF Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCF Group SA has no effect on the direction of Clean Carbon i.e., Clean Carbon and PCF Group go up and down completely randomly.
Pair Corralation between Clean Carbon and PCF Group
Assuming the 90 days trading horizon Clean Carbon Energy is expected to generate 1.14 times more return on investment than PCF Group. However, Clean Carbon is 1.14 times more volatile than PCF Group SA. It trades about -0.1 of its potential returns per unit of risk. PCF Group SA is currently generating about -0.16 per unit of risk. If you would invest 35.00 in Clean Carbon Energy on September 5, 2024 and sell it today you would lose (6.00) from holding Clean Carbon Energy or give up 17.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Carbon Energy vs. PCF Group SA
Performance |
| Timeline |
| Clean Carbon Energy |
| PCF Group SA |
Clean Carbon and PCF Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Carbon and PCF Group
The main advantage of trading using opposite Clean Carbon and PCF Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Carbon position performs unexpectedly, PCF Group 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 PCF Group will offset losses from the drop in PCF Group's long position.| Clean Carbon vs. New Tech Venture | Clean Carbon vs. PZ Cormay SA | Clean Carbon vs. Biztech Konsulting SA | Clean Carbon vs. Road Studio SA |
| PCF Group vs. Banco Santander SA | PCF Group vs. UniCredit SpA | PCF Group vs. CEZ as | PCF Group vs. Polski Koncern Naftowy |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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