Correlation Between Mazda and CGX Energy
Can any of the company-specific risk be diversified away by investing in both Mazda and CGX Energy 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 Mazda and CGX Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mazda Motor and CGX Energy, you can compare the effects of market volatilities on Mazda and CGX Energy 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 Mazda with a short position of CGX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mazda and CGX Energy.
Diversification Opportunities for Mazda and CGX Energy
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mazda and CGX is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mazda Motor and CGX Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGX Energy and Mazda 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 Mazda Motor are associated (or correlated) with CGX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGX Energy has no effect on the direction of Mazda i.e., Mazda and CGX Energy go up and down completely randomly.
Pair Corralation between Mazda and CGX Energy
Assuming the 90 days horizon Mazda Motor is expected to generate 0.28 times more return on investment than CGX Energy. However, Mazda Motor is 3.52 times less risky than CGX Energy. It trades about 0.14 of its potential returns per unit of risk. CGX Energy is currently generating about -0.03 per unit of risk. If you would invest 650.00 in Mazda Motor on December 6, 2024 and sell it today you would earn a total of 44.00 from holding Mazda Motor or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mazda Motor vs. CGX Energy
Performance |
| Timeline |
| Mazda Motor |
| CGX Energy |
Mazda and CGX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mazda and CGX Energy
The main advantage of trading using opposite Mazda and CGX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mazda position performs unexpectedly, CGX Energy 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 CGX Energy will offset losses from the drop in CGX Energy's long position.| Mazda vs. Nasdaq Inc | Mazda vs. Gerdau SA ADR | Mazda vs. Summit Environmental | Mazda vs. Black Spade Acquisition |
| CGX Energy vs. Avanti Energy | CGX Energy vs. Desert Mountain Energy | CGX Energy vs. Royal Helium | CGX Energy vs. Eco Oil Gas |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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