Correlation Between Metalliance and CMG Cleantech
Can any of the company-specific risk be diversified away by investing in both Metalliance and CMG Cleantech 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 Metalliance and CMG Cleantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metalliance SA and CMG Cleantech SA, you can compare the effects of market volatilities on Metalliance and CMG Cleantech 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 Metalliance with a short position of CMG Cleantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalliance and CMG Cleantech.
Diversification Opportunities for Metalliance and CMG Cleantech
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Metalliance and CMG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Metalliance SA and CMG Cleantech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMG Cleantech SA and Metalliance 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 Metalliance SA are associated (or correlated) with CMG Cleantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMG Cleantech SA has no effect on the direction of Metalliance i.e., Metalliance and CMG Cleantech go up and down completely randomly.
Pair Corralation between Metalliance and CMG Cleantech
Assuming the 90 days trading horizon Metalliance is expected to generate 3.02 times less return on investment than CMG Cleantech. But when comparing it to its historical volatility, Metalliance SA is 5.43 times less risky than CMG Cleantech. It trades about 0.04 of its potential returns per unit of risk. CMG Cleantech SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 130.00 in CMG Cleantech SA on August 26, 2024 and sell it today you would lose (10.00) from holding CMG Cleantech SA or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metalliance SA vs. CMG Cleantech SA
Performance |
| Timeline |
| Metalliance SA |
| CMG Cleantech SA |
Metalliance and CMG Cleantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalliance and CMG Cleantech
The main advantage of trading using opposite Metalliance and CMG Cleantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalliance position performs unexpectedly, CMG Cleantech 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 CMG Cleantech will offset losses from the drop in CMG Cleantech's long position.The idea behind Metalliance SA and CMG Cleantech SA 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.| CMG Cleantech vs. EPC Groupe | CMG Cleantech vs. Groupe Sfpi | CMG Cleantech vs. Baikowski SASU | CMG Cleantech vs. NSE SA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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