Correlation Between Cleantech Power and Rave Restaurant
Can any of the company-specific risk be diversified away by investing in both Cleantech Power and Rave Restaurant 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 Rave Restaurant 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 Rave Restaurant Group, you can compare the effects of market volatilities on Cleantech Power and Rave Restaurant 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 Rave Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleantech Power and Rave Restaurant.
Diversification Opportunities for Cleantech Power and Rave Restaurant
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cleantech and Rave is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cleantech Power Corp and Rave Restaurant Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rave Restaurant Group 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 Rave Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rave Restaurant Group has no effect on the direction of Cleantech Power i.e., Cleantech Power and Rave Restaurant go up and down completely randomly.
Pair Corralation between Cleantech Power and Rave Restaurant
Assuming the 90 days horizon Cleantech Power Corp is expected to generate 26.15 times more return on investment than Rave Restaurant. However, Cleantech Power is 26.15 times more volatile than Rave Restaurant Group. It trades about 0.09 of its potential returns per unit of risk. Rave Restaurant Group is currently generating about 0.03 per unit of risk. If you would invest 2.45 in Cleantech Power Corp on October 25, 2024 and sell it today you would lose (1.86) from holding Cleantech Power Corp or give up 75.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.68% |
| Values | Daily Returns |
Cleantech Power Corp vs. Rave Restaurant Group
Performance |
| Timeline |
| Cleantech Power Corp |
| Rave Restaurant Group |
Cleantech Power and Rave Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleantech Power and Rave Restaurant
The main advantage of trading using opposite Cleantech Power and Rave Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleantech Power position performs unexpectedly, Rave Restaurant 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 Rave Restaurant will offset losses from the drop in Rave Restaurant's long position.| Cleantech Power vs. NL Industries | Cleantech Power vs. Western Digital | Cleantech Power vs. Park Electrochemical | Cleantech Power vs. CVR Partners LP |
| Rave Restaurant vs. Ark Restaurants Corp | Rave Restaurant vs. One Group Hospitality | Rave Restaurant vs. Flanigans Enterprises | Rave Restaurant vs. Noble Romans |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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