Correlation Between Cleantech Power and Inter-Rock Minerals
Can any of the company-specific risk be diversified away by investing in both Cleantech Power and Inter-Rock Minerals 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 Cleantech Power and Inter-Rock Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleantech Power Corp and Inter Rock Minerals, you can compare the effects of market volatilities on Cleantech Power and Inter-Rock Minerals 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 Cleantech Power with a short position of Inter-Rock Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleantech Power and Inter-Rock Minerals.
Diversification Opportunities for Cleantech Power and Inter-Rock Minerals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cleantech and Inter-Rock is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cleantech Power Corp and Inter Rock Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Rock Minerals and Cleantech 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 Cleantech Power Corp are associated (or correlated) with Inter-Rock Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Rock Minerals has no effect on the direction of Cleantech Power i.e., Cleantech Power and Inter-Rock Minerals go up and down completely randomly.
Pair Corralation between Cleantech Power and Inter-Rock Minerals
Assuming the 90 days horizon Cleantech Power Corp is expected to generate 59.67 times more return on investment than Inter-Rock Minerals. However, Cleantech Power is 59.67 times more volatile than Inter Rock Minerals. It trades about 0.09 of its potential returns per unit of risk. Inter Rock Minerals is currently generating about 0.01 per unit of risk. If you would invest 3.76 in Cleantech Power Corp on December 12, 2024 and sell it today you would lose (3.17) from holding Cleantech Power Corp or give up 84.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.58% |
| Values | Daily Returns |
Cleantech Power Corp vs. Inter Rock Minerals
Performance |
| Timeline |
| Cleantech Power Corp |
| Inter Rock Minerals |
Cleantech Power and Inter-Rock Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleantech Power and Inter-Rock Minerals
The main advantage of trading using opposite Cleantech Power and Inter-Rock Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleantech Power position performs unexpectedly, Inter-Rock Minerals 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 Inter-Rock Minerals will offset losses from the drop in Inter-Rock Minerals' long position.| Cleantech Power vs. Ecolab Inc | ||
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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