Correlation Between Carnegie Clean and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and Yuexiu Transport 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 Yuexiu Transport 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 Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Carnegie Clean and Yuexiu Transport 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 Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and Yuexiu Transport.
Diversification Opportunities for Carnegie Clean and Yuexiu Transport
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Carnegie and Yuexiu is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf 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 Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Carnegie Clean and Yuexiu Transport
Assuming the 90 days trading horizon Carnegie Clean Energy is expected to generate 2.91 times more return on investment than Yuexiu Transport. However, Carnegie Clean is 2.91 times more volatile than Yuexiu Transport Infrastructure. It trades about 0.06 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about -0.04 per unit of risk. If you would invest 2.04 in Carnegie Clean Energy on November 7, 2024 and sell it today you would earn a total of 0.08 from holding Carnegie Clean Energy or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Carnegie Clean Energy vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Carnegie Clean Energy |
| Yuexiu Transport Inf |
Carnegie Clean and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and Yuexiu Transport
The main advantage of trading using opposite Carnegie Clean and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.| Carnegie Clean vs. Cellnex Telecom SA | Carnegie Clean vs. Tower Semiconductor | Carnegie Clean vs. Zoom Video Communications | Carnegie Clean vs. Entravision Communications |
| Yuexiu Transport vs. NTT DATA | Yuexiu Transport vs. Datadog | Yuexiu Transport vs. INFORMATION SVC GRP | Yuexiu Transport vs. DATATEC LTD 2 |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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