Correlation Between OPAL Fuels and China Natural

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Can any of the company-specific risk be diversified away by investing in both OPAL Fuels and China Natural 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 OPAL Fuels and China Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPAL Fuels and China Natural Cmn, you can compare the effects of market volatilities on OPAL Fuels and China Natural 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 OPAL Fuels with a short position of China Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPAL Fuels and China Natural.

Diversification Opportunities for OPAL Fuels and China Natural

OPALChinaDiversified AwayOPALChinaDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between OPAL and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding OPAL Fuels and China Natural Cmn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Natural Cmn and OPAL Fuels 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 OPAL Fuels are associated (or correlated) with China Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Natural Cmn has no effect on the direction of OPAL Fuels i.e., OPAL Fuels and China Natural go up and down completely randomly.

Pair Corralation between OPAL Fuels and China Natural

If you would invest (100.00) in China Natural Cmn on November 24, 2024 and sell it today you would earn a total of  100.00  from holding China Natural Cmn or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

OPAL Fuels  vs.  China Natural Cmn

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-505
JavaScript chart by amCharts 3.21.15OPAL CHNGQ
       Timeline  
OPAL Fuels 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days OPAL Fuels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb33.23.43.63.84
China Natural Cmn 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days China Natural Cmn has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, China Natural is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

OPAL Fuels and China Natural Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.81-2.85-1.9-0.940.00.821.642.463.28 0.020.040.060.08
JavaScript chart by amCharts 3.21.15OPAL CHNGQ
       Returns  

Pair Trading with OPAL Fuels and China Natural

The main advantage of trading using opposite OPAL Fuels and China Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPAL Fuels position performs unexpectedly, China Natural 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 China Natural will offset losses from the drop in China Natural's long position.
The idea behind OPAL Fuels and China Natural Cmn 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.
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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