Correlation Between CVW CLEANTECH and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and CHINA EDUCATION 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP, you can compare the effects of market volatilities on CVW CLEANTECH and CHINA EDUCATION 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and CHINA EDUCATION.
Diversification Opportunities for CVW CLEANTECH and CHINA EDUCATION
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVW and CHINA is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and CHINA EDUCATION
Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to under-perform the CHINA EDUCATION. In addition to that, CVW CLEANTECH is 1.46 times more volatile than CHINA EDUCATION GROUP. It trades about -0.15 of its total potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about 0.01 per unit of volatility. If you would invest 41.00 in CHINA EDUCATION GROUP on October 29, 2024 and sell it today you would earn a total of 0.00 from holding CHINA EDUCATION GROUP or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CLEANTECH INC vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| CVW CLEANTECH INC |
| CHINA EDUCATION GROUP |
CVW CLEANTECH and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and CHINA EDUCATION
The main advantage of trading using opposite CVW CLEANTECH and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH position performs unexpectedly, CHINA EDUCATION 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 EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| CVW CLEANTECH vs. Rio Tinto Group | CVW CLEANTECH vs. Anglo American plc | CVW CLEANTECH vs. Mineral Resources Limited | CVW CLEANTECH vs. NEXA RESOURCES SA |
| CHINA EDUCATION vs. AIR PRODCHEMICALS | CHINA EDUCATION vs. Cal Maine Foods | CHINA EDUCATION vs. PURE FOODS TASMANIA | CHINA EDUCATION vs. Carnegie Clean Energy |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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