Correlation Between Huaneng Power and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both Huaneng Power 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 Huaneng Power and Carnegie Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huaneng Power International and Carnegie Clean Energy, you can compare the effects of market volatilities on Huaneng Power 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 Huaneng Power with a short position of Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaneng Power and Carnegie Clean.
Diversification Opportunities for Huaneng Power and Carnegie Clean
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Huaneng and Carnegie is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Huaneng Power International 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 Huaneng Power 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 Huaneng Power International 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 Huaneng Power i.e., Huaneng Power and Carnegie Clean go up and down completely randomly.
Pair Corralation between Huaneng Power and Carnegie Clean
Assuming the 90 days trading horizon Huaneng Power International is expected to generate 0.54 times more return on investment than Carnegie Clean. However, Huaneng Power International is 1.86 times less risky than Carnegie Clean. It trades about 0.04 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about 0.02 per unit of risk. If you would invest 32.00 in Huaneng Power International on September 25, 2024 and sell it today you would earn a total of 18.00 from holding Huaneng Power International or generate 56.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaneng Power International vs. Carnegie Clean Energy
Performance |
| Timeline |
| Huaneng Power Intern |
| Carnegie Clean Energy |
Huaneng Power and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaneng Power and Carnegie Clean
The main advantage of trading using opposite Huaneng Power and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaneng Power 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.| Huaneng Power vs. X FAB Silicon Foundries | Huaneng Power vs. Gladstone Investment | Huaneng Power vs. Chuangs China Investments | Huaneng Power vs. Strategic Investments AS |
| Carnegie Clean vs. Orsted AS | Carnegie Clean vs. EDP Renovveis SA | Carnegie Clean vs. CGN Power Co | Carnegie Clean vs. Huaneng Power International |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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