Correlation Between Carnegie Clean and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and CHINA EDUCATION 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP, you can compare the effects of market volatilities on Carnegie Clean and CHINA EDUCATION 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and CHINA EDUCATION.
Diversification Opportunities for Carnegie Clean and CHINA EDUCATION
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Carnegie and CHINA is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between Carnegie Clean and CHINA EDUCATION
Assuming the 90 days trading horizon Carnegie Clean Energy is expected to generate 1.21 times more return on investment than CHINA EDUCATION. However, Carnegie Clean is 1.21 times more volatile than CHINA EDUCATION GROUP. It trades about 0.03 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about -0.02 per unit of risk. If you would invest 2.00 in Carnegie Clean Energy on November 7, 2024 and sell it today you would earn a total of 0.12 from holding Carnegie Clean Energy or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnegie Clean Energy vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| Carnegie Clean Energy |
| CHINA EDUCATION GROUP |
Carnegie Clean and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and CHINA EDUCATION
The main advantage of trading using opposite Carnegie Clean and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION'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 |
| CHINA EDUCATION vs. CeoTronics AG | CHINA EDUCATION vs. Sims Metal Management | CHINA EDUCATION vs. Scientific Games | CHINA EDUCATION vs. CLOVER HEALTH INV |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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