Correlation Between Energy Absolute and CI Group
Can any of the company-specific risk be diversified away by investing in both Energy Absolute and CI Group 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 Energy Absolute and CI Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Absolute Public and CI Group Public, you can compare the effects of market volatilities on Energy Absolute and CI Group 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 Energy Absolute with a short position of CI Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Absolute and CI Group.
Diversification Opportunities for Energy Absolute and CI Group
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Energy and CIG is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Energy Absolute Public and CI Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Group Public and Energy Absolute 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 Energy Absolute Public are associated (or correlated) with CI Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Group Public has no effect on the direction of Energy Absolute i.e., Energy Absolute and CI Group go up and down completely randomly.
Pair Corralation between Energy Absolute and CI Group
Assuming the 90 days horizon Energy Absolute Public is expected to under-perform the CI Group. But the stock apears to be less risky and, when comparing its historical volatility, Energy Absolute Public is 3.39 times less risky than CI Group. The stock trades about -0.39 of its potential returns per unit of risk. The CI Group Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5.00 in CI Group Public on August 26, 2024 and sell it today you would earn a total of 0.00 from holding CI Group Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Absolute Public vs. CI Group Public
Performance |
| Timeline |
| Energy Absolute Public |
| CI Group Public |
Energy Absolute and CI Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Absolute and CI Group
The main advantage of trading using opposite Energy Absolute and CI Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Absolute position performs unexpectedly, CI Group 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 CI Group will offset losses from the drop in CI Group's long position.| Energy Absolute vs. PTT Oil and | Energy Absolute vs. Power Solution Technologies | Energy Absolute vs. Star Petroleum Refining | Energy Absolute vs. Prima Marine Public |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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