Correlation Between Power Assets and CGN Power
Can any of the company-specific risk be diversified away by investing in both Power Assets and CGN Power 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 Power Assets and CGN Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Assets Holdings and CGN Power Co, you can compare the effects of market volatilities on Power Assets and CGN Power 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 Power Assets with a short position of CGN Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Assets and CGN Power.
Diversification Opportunities for Power Assets and CGN Power
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Power and CGN is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Power Assets Holdings and CGN Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGN Power and Power Assets 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 Power Assets Holdings are associated (or correlated) with CGN Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGN Power has no effect on the direction of Power Assets i.e., Power Assets and CGN Power go up and down completely randomly.
Pair Corralation between Power Assets and CGN Power
If you would invest 615.00 in Power Assets Holdings on September 25, 2024 and sell it today you would earn a total of 30.00 from holding Power Assets Holdings or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Power Assets Holdings vs. CGN Power Co
Performance |
| Timeline |
| Power Assets Holdings |
| CGN Power |
Power Assets and CGN Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Assets and CGN Power
The main advantage of trading using opposite Power Assets and CGN Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Assets position performs unexpectedly, CGN Power 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 CGN Power will offset losses from the drop in CGN Power's long position.| Power Assets vs. Orsted AS | Power Assets vs. EDP Renovveis SA | Power Assets vs. CGN Power Co | Power Assets vs. Huaneng Power International |
| CGN Power vs. Orsted AS | CGN Power vs. EDP Renovveis SA | CGN Power vs. Huaneng Power International | CGN Power vs. Power Assets Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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