Correlation Between CVW CleanTech and JEMTEC
Can any of the company-specific risk be diversified away by investing in both CVW CleanTech and JEMTEC 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 JEMTEC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CleanTech and JEMTEC Inc, you can compare the effects of market volatilities on CVW CleanTech and JEMTEC 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 JEMTEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and JEMTEC.
Diversification Opportunities for CVW CleanTech and JEMTEC
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CVW and JEMTEC is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech and JEMTEC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JEMTEC Inc 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 JEMTEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JEMTEC Inc has no effect on the direction of CVW CleanTech i.e., CVW CleanTech and JEMTEC go up and down completely randomly.
Pair Corralation between CVW CleanTech and JEMTEC
Assuming the 90 days horizon CVW CleanTech is expected to generate 1.15 times more return on investment than JEMTEC. However, CVW CleanTech is 1.15 times more volatile than JEMTEC Inc. It trades about 0.07 of its potential returns per unit of risk. JEMTEC Inc is currently generating about 0.04 per unit of risk. If you would invest 55.00 in CVW CleanTech on December 4, 2024 and sell it today you would earn a total of 30.00 from holding CVW CleanTech or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CleanTech vs. JEMTEC Inc
Performance |
| Timeline |
| CVW CleanTech |
| JEMTEC Inc |
CVW CleanTech and JEMTEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CleanTech and JEMTEC
The main advantage of trading using opposite CVW CleanTech and JEMTEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CleanTech position performs unexpectedly, JEMTEC 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 JEMTEC will offset losses from the drop in JEMTEC's long position.The idea behind CVW CleanTech and JEMTEC Inc 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.| JEMTEC vs. Sun Peak Metals | JEMTEC vs. Farstarcap Investment Corp | JEMTEC vs. Atrium Mortgage Investment | JEMTEC vs. Economic Investment Trust |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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