Correlation Between E Xim and Clean Carbon
Can any of the company-specific risk be diversified away by investing in both E Xim and Clean Carbon 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 E Xim and Clean Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Xim IT and Clean Carbon Energy, you can compare the effects of market volatilities on E Xim and Clean Carbon 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 E Xim with a short position of Clean Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Xim and Clean Carbon.
Diversification Opportunities for E Xim and Clean Carbon
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EXM and Clean is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding E Xim IT and Clean Carbon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Carbon Energy and E Xim 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 E Xim IT are associated (or correlated) with Clean Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Carbon Energy has no effect on the direction of E Xim i.e., E Xim and Clean Carbon go up and down completely randomly.
Pair Corralation between E Xim and Clean Carbon
Assuming the 90 days trading horizon E Xim IT is expected to generate 0.43 times more return on investment than Clean Carbon. However, E Xim IT is 2.32 times less risky than Clean Carbon. It trades about 0.53 of its potential returns per unit of risk. Clean Carbon Energy is currently generating about 0.1 per unit of risk. If you would invest 13,900 in E Xim IT on August 26, 2024 and sell it today you would earn a total of 2,600 from holding E Xim IT or generate 18.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 55.0% |
| Values | Daily Returns |
E Xim IT vs. Clean Carbon Energy
Performance |
| Timeline |
| E Xim IT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Clean Carbon Energy |
E Xim and Clean Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Xim and Clean Carbon
The main advantage of trading using opposite E Xim and Clean Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Xim position performs unexpectedly, Clean Carbon 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 Clean Carbon will offset losses from the drop in Clean Carbon's long position.The idea behind E Xim IT and Clean Carbon Energy 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.| Clean Carbon vs. Lubelski Wegiel Bogdanka | Clean Carbon vs. Asseco Business Solutions | Clean Carbon vs. Detalion Games SA | Clean Carbon vs. Asseco South Eastern |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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