Correlation Between CVW CleanTech and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both CVW CleanTech and Canadian Utilities 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 CVW CleanTech and Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CleanTech and Canadian Utilities Ltd, you can compare the effects of market volatilities on CVW CleanTech and Canadian Utilities 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 CVW CleanTech with a short position of Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and Canadian Utilities.
Diversification Opportunities for CVW CleanTech and Canadian Utilities
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between CVW and Canadian is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech and Canadian Utilities Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities and CVW CleanTech 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 CVW CleanTech are associated (or correlated) with Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of CVW CleanTech i.e., CVW CleanTech and Canadian Utilities go up and down completely randomly.
Pair Corralation between CVW CleanTech and Canadian Utilities
Assuming the 90 days horizon CVW CleanTech is expected to generate 3.34 times more return on investment than Canadian Utilities. However, CVW CleanTech is 3.34 times more volatile than Canadian Utilities Ltd. It trades about 0.04 of its potential returns per unit of risk. Canadian Utilities Ltd is currently generating about 0.02 per unit of risk. If you would invest 87.00 in CVW CleanTech on September 12, 2024 and sell it today you would earn a total of 3.00 from holding CVW CleanTech or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CleanTech vs. Canadian Utilities Ltd
Performance |
| Timeline |
| CVW CleanTech |
| Canadian Utilities |
CVW CleanTech and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CleanTech and Canadian Utilities
The main advantage of trading using opposite CVW CleanTech and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CleanTech position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| CVW CleanTech vs. Ressources Minieres Radisson | CVW CleanTech vs. Galantas Gold Corp | CVW CleanTech vs. Red Pine Exploration | CVW CleanTech vs. Kore Mining |
| Canadian Utilities vs. Bird Construction | Canadian Utilities vs. Cogeco Communications | Canadian Utilities vs. Information Services | Canadian Utilities vs. Broadcom |
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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