Correlation Between Element Fleet and CVW CleanTech
Can any of the company-specific risk be diversified away by investing in both Element Fleet and CVW CleanTech 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 Element Fleet and CVW CleanTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Element Fleet Management and CVW CleanTech, you can compare the effects of market volatilities on Element Fleet and CVW CleanTech 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 Element Fleet with a short position of CVW CleanTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Element Fleet and CVW CleanTech.
Diversification Opportunities for Element Fleet and CVW CleanTech
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Element and CVW is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Element Fleet Management and CVW CleanTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CleanTech and Element Fleet 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 Element Fleet Management are associated (or correlated) with CVW CleanTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CleanTech has no effect on the direction of Element Fleet i.e., Element Fleet and CVW CleanTech go up and down completely randomly.
Pair Corralation between Element Fleet and CVW CleanTech
Assuming the 90 days trading horizon Element Fleet Management is expected to generate 0.29 times more return on investment than CVW CleanTech. However, Element Fleet Management is 3.4 times less risky than CVW CleanTech. It trades about 0.08 of its potential returns per unit of risk. CVW CleanTech is currently generating about 0.01 per unit of risk. If you would invest 1,755 in Element Fleet Management on September 14, 2024 and sell it today you would earn a total of 1,142 from holding Element Fleet Management or generate 65.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Element Fleet Management vs. CVW CleanTech
Performance |
| Timeline |
| Element Fleet Management |
| CVW CleanTech |
Element Fleet and CVW CleanTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Element Fleet and CVW CleanTech
The main advantage of trading using opposite Element Fleet and CVW CleanTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Element Fleet position performs unexpectedly, CVW CleanTech 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 CVW CleanTech will offset losses from the drop in CVW CleanTech's long position.| Element Fleet vs. ECN Capital Corp | Element Fleet vs. Martinrea International | Element Fleet vs. CCL Industries | Element Fleet vs. FirstService Corp |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |