Correlation Between Capital Clean and Hawkins
Can any of the company-specific risk be diversified away by investing in both Capital Clean and Hawkins 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 Capital Clean and Hawkins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Clean Energy and Hawkins, you can compare the effects of market volatilities on Capital Clean and Hawkins 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 Capital Clean with a short position of Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and Hawkins.
Diversification Opportunities for Capital Clean and Hawkins
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and Hawkins is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins and Capital 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 Capital Clean Energy are associated (or correlated) with Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Capital Clean i.e., Capital Clean and Hawkins go up and down completely randomly.
Pair Corralation between Capital Clean and Hawkins
Given the investment horizon of 90 days Capital Clean Energy is expected to generate 0.46 times more return on investment than Hawkins. However, Capital Clean Energy is 2.19 times less risky than Hawkins. It trades about -0.05 of its potential returns per unit of risk. Hawkins is currently generating about -0.29 per unit of risk. If you would invest 1,860 in Capital Clean Energy on October 14, 2024 and sell it today you would lose (27.00) from holding Capital Clean Energy or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Clean Energy vs. Hawkins
Performance |
| Timeline |
| Capital Clean Energy |
| Hawkins |
Capital Clean and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Clean and Hawkins
The main advantage of trading using opposite Capital Clean and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Clean position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.| Capital Clean vs. JetBlue Airways Corp | Capital Clean vs. Singapore Airlines | Capital Clean vs. Asure Software | Capital Clean vs. Uber Technologies |
| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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