Correlation Between Hawsons Iron and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both Hawsons Iron and Carnegie Clean 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 Hawsons Iron and Carnegie Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawsons Iron and Carnegie Clean Energy, you can compare the effects of market volatilities on Hawsons Iron and Carnegie Clean 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 Hawsons Iron with a short position of Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawsons Iron and Carnegie Clean.
Diversification Opportunities for Hawsons Iron and Carnegie Clean
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hawsons and Carnegie is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hawsons Iron and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy and Hawsons Iron 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 Hawsons Iron are associated (or correlated) with Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of Hawsons Iron i.e., Hawsons Iron and Carnegie Clean go up and down completely randomly.
Pair Corralation between Hawsons Iron and Carnegie Clean
Assuming the 90 days trading horizon Hawsons Iron is expected to generate 1.37 times more return on investment than Carnegie Clean. However, Hawsons Iron is 1.37 times more volatile than Carnegie Clean Energy. It trades about -0.04 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about -0.1 per unit of risk. If you would invest 1.90 in Hawsons Iron on October 11, 2024 and sell it today you would lose (0.10) from holding Hawsons Iron or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawsons Iron vs. Carnegie Clean Energy
Performance |
| Timeline |
| Hawsons Iron |
| Carnegie Clean Energy |
Hawsons Iron and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawsons Iron and Carnegie Clean
The main advantage of trading using opposite Hawsons Iron and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawsons Iron position performs unexpectedly, Carnegie Clean 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 Carnegie Clean will offset losses from the drop in Carnegie Clean's long position.| Hawsons Iron vs. Falcon Metals | Hawsons Iron vs. Centrex Metals | Hawsons Iron vs. Torque Metals | Hawsons Iron vs. Perseus Mining |
| Carnegie Clean vs. Sequoia Financial Group | Carnegie Clean vs. Auswide Bank | Carnegie Clean vs. Kkr Credit Income | Carnegie Clean vs. Insignia Financial |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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