Correlation Between Carnegie Clean and Hua Hong
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and Hua Hong 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 Hua Hong 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 Hua Hong Semiconductor, you can compare the effects of market volatilities on Carnegie Clean and Hua Hong 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 Hua Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and Hua Hong.
Diversification Opportunities for Carnegie Clean and Hua Hong
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carnegie and Hua is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Hua Hong Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Hong Semiconductor 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 Hua Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Hong Semiconductor has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Hua Hong go up and down completely randomly.
Pair Corralation between Carnegie Clean and Hua Hong
Assuming the 90 days trading horizon Carnegie Clean is expected to generate 1.72 times less return on investment than Hua Hong. But when comparing it to its historical volatility, Carnegie Clean Energy is 1.02 times less risky than Hua Hong. It trades about 0.04 of its potential returns per unit of risk. Hua Hong Semiconductor is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 218.00 in Hua Hong Semiconductor on November 3, 2024 and sell it today you would earn a total of 62.00 from holding Hua Hong Semiconductor or generate 28.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnegie Clean Energy vs. Hua Hong Semiconductor
Performance |
| Timeline |
| Carnegie Clean Energy |
| Hua Hong Semiconductor |
Carnegie Clean and Hua Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and Hua Hong
The main advantage of trading using opposite Carnegie Clean and Hua Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean position performs unexpectedly, Hua Hong 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 Hua Hong will offset losses from the drop in Hua Hong's long position.| Carnegie Clean vs. INTER CARS SA | Carnegie Clean vs. GRUPO CARSO A1 | Carnegie Clean vs. CARSALESCOM | Carnegie Clean vs. ULTRA CLEAN HLDGS |
| Hua Hong vs. Sunny Optical Technology | Hua Hong vs. United States Steel | Hua Hong vs. Olympic Steel | Hua Hong vs. COSMOSTEEL HLDGS |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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