Correlation Between CVW CLEANTECH and GB Group
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and GB Group 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 CVW CLEANTECH and GB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CLEANTECH INC and GB Group plc, you can compare the effects of market volatilities on CVW CLEANTECH and GB Group 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 CVW CLEANTECH with a short position of GB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and GB Group.
Diversification Opportunities for CVW CLEANTECH and GB Group
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CVW and 0GB is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and GB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GB Group plc and CVW CLEANTECH 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 CVW CLEANTECH INC are associated (or correlated) with GB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GB Group plc has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and GB Group go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and GB Group
Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to generate 2.69 times more return on investment than GB Group. However, CVW CLEANTECH is 2.69 times more volatile than GB Group plc. It trades about 0.05 of its potential returns per unit of risk. GB Group plc is currently generating about -0.06 per unit of risk. If you would invest 56.00 in CVW CLEANTECH INC on October 23, 2024 and sell it today you would earn a total of 1.00 from holding CVW CLEANTECH INC or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
CVW CLEANTECH INC vs. GB Group plc
Performance |
| Timeline |
| CVW CLEANTECH INC |
| GB Group plc |
CVW CLEANTECH and GB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and GB Group
The main advantage of trading using opposite CVW CLEANTECH and GB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH position performs unexpectedly, GB Group 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 GB Group will offset losses from the drop in GB Group's long position.| CVW CLEANTECH vs. Rio Tinto Group | CVW CLEANTECH vs. Anglo American plc | CVW CLEANTECH vs. Mineral Resources Limited | CVW CLEANTECH vs. Liontown Resources Limited |
| GB Group vs. SIDETRADE EO 1 | GB Group vs. Scandinavian Tobacco Group | GB Group vs. Fast Retailing Co | GB Group vs. CVW CLEANTECH INC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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