Correlation Between Commercial Vehicle and Power Assets
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle and Power Assets 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 Commercial Vehicle and Power Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and Power Assets Holdings, you can compare the effects of market volatilities on Commercial Vehicle and Power Assets 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 Commercial Vehicle with a short position of Power Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Power Assets.
Diversification Opportunities for Commercial Vehicle and Power Assets
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commercial and Power is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Power Assets Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Assets Holdings and Commercial Vehicle 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 Commercial Vehicle Group are associated (or correlated) with Power Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Assets Holdings has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and Power Assets go up and down completely randomly.
Pair Corralation between Commercial Vehicle and Power Assets
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the Power Assets. In addition to that, Commercial Vehicle is 2.87 times more volatile than Power Assets Holdings. It trades about -0.15 of its total potential returns per unit of risk. Power Assets Holdings is currently generating about 0.15 per unit of volatility. If you would invest 630.00 in Power Assets Holdings on October 13, 2024 and sell it today you would earn a total of 20.00 from holding Power Assets Holdings or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Commercial Vehicle Group vs. Power Assets Holdings
Performance |
| Timeline |
| Commercial Vehicle |
| Power Assets Holdings |
Commercial Vehicle and Power Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and Power Assets
The main advantage of trading using opposite Commercial Vehicle and Power Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle position performs unexpectedly, Power Assets 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 Power Assets will offset losses from the drop in Power Assets' long position.| Commercial Vehicle vs. TRAVEL LEISURE DL 01 | Commercial Vehicle vs. CENTURIA OFFICE REIT | Commercial Vehicle vs. PLAYTECH | Commercial Vehicle vs. IMPERIAL TOBACCO |
| Power Assets vs. Commercial Vehicle Group | Power Assets vs. Yuexiu Transport Infrastructure | Power Assets vs. Gold Road Resources | Power Assets vs. GRUPO CARSO A1 |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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