Correlation Between Carnegie Clean and American Public
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and American Public 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 American Public 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 American Public Education, you can compare the effects of market volatilities on Carnegie Clean and American Public 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 American Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and American Public.
Diversification Opportunities for Carnegie Clean and American Public
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Carnegie and American is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and American Public Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Public Education 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 American Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Public Education has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and American Public go up and down completely randomly.
Pair Corralation between Carnegie Clean and American Public
Assuming the 90 days trading horizon Carnegie Clean is expected to generate 2.96 times less return on investment than American Public. In addition to that, Carnegie Clean is 1.49 times more volatile than American Public Education. It trades about 0.04 of its total potential returns per unit of risk. American Public Education is currently generating about 0.18 per unit of volatility. If you would invest 1,590 in American Public Education on November 7, 2024 and sell it today you would earn a total of 510.00 from holding American Public Education or generate 32.08% 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. American Public Education
Performance |
| Timeline |
| Carnegie Clean Energy |
| American Public Education |
Carnegie Clean and American Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and American Public
The main advantage of trading using opposite Carnegie Clean and American Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean position performs unexpectedly, American Public 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 American Public will offset losses from the drop in American Public's long position.| Carnegie Clean vs. Apollo Investment Corp | Carnegie Clean vs. RYANAIR HLDGS ADR | Carnegie Clean vs. Air New Zealand | Carnegie Clean vs. CHRYSALIS INVESTMENTS LTD |
| American Public vs. CENTURIA OFFICE REIT | American Public vs. Aristocrat Leisure Limited | American Public vs. TRAVEL LEISURE DL 01 | American Public vs. Neinor Homes SA |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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