Correlation Between Carnegie Clean and CAPITAL ONE
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and CAPITAL ONE 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 CAPITAL ONE 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 CAPITAL ONE FIN, you can compare the effects of market volatilities on Carnegie Clean and CAPITAL ONE 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 CAPITAL ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and CAPITAL ONE.
Diversification Opportunities for Carnegie Clean and CAPITAL ONE
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Carnegie and CAPITAL is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and CAPITAL ONE FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAPITAL ONE FIN 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 CAPITAL ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAPITAL ONE FIN has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and CAPITAL ONE go up and down completely randomly.
Pair Corralation between Carnegie Clean and CAPITAL ONE
Assuming the 90 days trading horizon Carnegie Clean Energy is expected to generate 5.5 times more return on investment than CAPITAL ONE. However, Carnegie Clean is 5.5 times more volatile than CAPITAL ONE FIN. It trades about 0.02 of its potential returns per unit of risk. CAPITAL ONE FIN is currently generating about 0.04 per unit of risk. If you would invest 4.00 in Carnegie Clean Energy on September 14, 2024 and sell it today you would lose (1.88) from holding Carnegie Clean Energy or give up 47.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Carnegie Clean Energy vs. CAPITAL ONE FIN
Performance |
| Timeline |
| Carnegie Clean Energy |
| CAPITAL ONE FIN |
Carnegie Clean and CAPITAL ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and CAPITAL ONE
The main advantage of trading using opposite Carnegie Clean and CAPITAL ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean position performs unexpectedly, CAPITAL ONE 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 CAPITAL ONE will offset losses from the drop in CAPITAL ONE's long position.| Carnegie Clean vs. Superior Plus Corp | Carnegie Clean vs. SIVERS SEMICONDUCTORS AB | Carnegie Clean vs. Norsk Hydro ASA | Carnegie Clean vs. Reliance Steel Aluminum |
| CAPITAL ONE vs. Magnachip Semiconductor | CAPITAL ONE vs. Carnegie Clean Energy | CAPITAL ONE vs. ADRIATIC METALS LS 013355 | CAPITAL ONE vs. SCANSOURCE |
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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