Correlation Between CVW CLEANTECH and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and Commercial Vehicle 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 Commercial Vehicle 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 Commercial Vehicle Group, you can compare the effects of market volatilities on CVW CLEANTECH and Commercial Vehicle 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 Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and Commercial Vehicle.
Diversification Opportunities for CVW CLEANTECH and Commercial Vehicle
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CVW and Commercial is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle 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 Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and Commercial Vehicle go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and Commercial Vehicle
Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to generate 0.46 times more return on investment than Commercial Vehicle. However, CVW CLEANTECH INC is 2.17 times less risky than Commercial Vehicle. It trades about 0.2 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.25 per unit of risk. If you would invest 53.00 in CVW CLEANTECH INC on August 31, 2024 and sell it today you would earn a total of 4.00 from holding CVW CLEANTECH INC or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CLEANTECH INC vs. Commercial Vehicle Group
Performance |
| Timeline |
| CVW CLEANTECH INC |
| Commercial Vehicle |
CVW CLEANTECH and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and Commercial Vehicle
The main advantage of trading using opposite CVW CLEANTECH and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| CVW CLEANTECH vs. Rio Tinto Group | CVW CLEANTECH vs. Liontown Resources Limited | CVW CLEANTECH vs. American Lithium Corp |
| Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |