Correlation Between Mass Megawat and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both Mass Megawat 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 Mass Megawat and Carnegie Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mass Megawat Wind and Carnegie Clean Energy, you can compare the effects of market volatilities on Mass Megawat 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 Mass Megawat with a short position of Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mass Megawat and Carnegie Clean.
Diversification Opportunities for Mass Megawat and Carnegie Clean
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mass and Carnegie is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mass Megawat Wind 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 Mass Megawat 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 Mass Megawat Wind 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 Mass Megawat i.e., Mass Megawat and Carnegie Clean go up and down completely randomly.
Pair Corralation between Mass Megawat and Carnegie Clean
Given the investment horizon of 90 days Mass Megawat is expected to generate 1.3 times less return on investment than Carnegie Clean. But when comparing it to its historical volatility, Mass Megawat Wind is 1.16 times less risky than Carnegie Clean. It trades about 0.08 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5.50 in Carnegie Clean Energy on October 24, 2024 and sell it today you would lose (3.06) from holding Carnegie Clean Energy or give up 55.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.19% |
| Values | Daily Returns |
Mass Megawat Wind vs. Carnegie Clean Energy
Performance |
| Timeline |
| Mass Megawat Wind |
| Carnegie Clean Energy |
Mass Megawat and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mass Megawat and Carnegie Clean
The main advantage of trading using opposite Mass Megawat and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mass Megawat 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.| Mass Megawat vs. Wind Works Power | Mass Megawat vs. Alternus Energy Group | Mass Megawat vs. Kansai Electric Power | Mass Megawat vs. Green Stream Holdings |
| Carnegie Clean vs. Astra Energy | Carnegie Clean vs. Brenmiller Energy Ltd | Carnegie Clean vs. Clean Vision Corp | Carnegie Clean vs. Alternus Energy Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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