Correlation Between Carnegie Clean and DISTRICT METALS

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Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and DISTRICT METALS 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 DISTRICT METALS 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 DISTRICT METALS, you can compare the effects of market volatilities on Carnegie Clean and DISTRICT METALS 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 DISTRICT METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and DISTRICT METALS.

Diversification Opportunities for Carnegie Clean and DISTRICT METALS

-0.03
  Correlation Coefficient

Good diversification

The 3 months correlation between Carnegie and DISTRICT is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and DISTRICT METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISTRICT METALS 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 DISTRICT METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISTRICT METALS has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and DISTRICT METALS go up and down completely randomly.

Pair Corralation between Carnegie Clean and DISTRICT METALS

Assuming the 90 days trading horizon Carnegie Clean Energy is expected to under-perform the DISTRICT METALS. But the stock apears to be less risky and, when comparing its historical volatility, Carnegie Clean Energy is 1.87 times less risky than DISTRICT METALS. The stock trades about -0.03 of its potential returns per unit of risk. The DISTRICT METALS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  23.00  in DISTRICT METALS on September 25, 2024 and sell it today you would earn a total of  1.00  from holding DISTRICT METALS or generate 4.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Carnegie Clean Energy  vs.  DISTRICT METALS

 Performance 
       Timeline  
Carnegie Clean Energy 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Carnegie Clean Energy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Carnegie Clean is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
DISTRICT METALS 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in DISTRICT METALS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DISTRICT METALS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Carnegie Clean and DISTRICT METALS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Carnegie Clean and DISTRICT METALS

The main advantage of trading using opposite Carnegie Clean and DISTRICT METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean position performs unexpectedly, DISTRICT METALS 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 DISTRICT METALS will offset losses from the drop in DISTRICT METALS's long position.
The idea behind Carnegie Clean Energy and DISTRICT METALS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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