Correlation Between CVW CLEANTECH and Hong Kong
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and Hong Kong 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 Hong Kong 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 Hong Kong Exchanges, you can compare the effects of market volatilities on CVW CLEANTECH and Hong Kong 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 Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and Hong Kong.
Diversification Opportunities for CVW CLEANTECH and Hong Kong
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CVW and Hong is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and Hong Kong Exchanges in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Exchanges 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 Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Exchanges has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and Hong Kong go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and Hong Kong
Assuming the 90 days trading horizon CVW CLEANTECH is expected to generate 1.75 times less return on investment than Hong Kong. In addition to that, CVW CLEANTECH is 1.7 times more volatile than Hong Kong Exchanges. It trades about 0.01 of its total potential returns per unit of risk. Hong Kong Exchanges is currently generating about 0.04 per unit of volatility. If you would invest 2,384 in Hong Kong Exchanges on October 25, 2024 and sell it today you would earn a total of 1,198 from holding Hong Kong Exchanges or generate 50.25% 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. Hong Kong Exchanges
Performance |
| Timeline |
| CVW CLEANTECH INC |
| Hong Kong Exchanges |
CVW CLEANTECH and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and Hong Kong
The main advantage of trading using opposite CVW CLEANTECH and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong'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 |
| Hong Kong vs. Broadridge Financial Solutions | Hong Kong vs. KINGBOARD CHEMICAL | Hong Kong vs. Liberty Broadband | Hong Kong vs. Shin Etsu Chemical Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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