Correlation Between CVW CLEANTECH and Huaneng Power
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and Huaneng Power 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 Huaneng Power 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 Huaneng Power International, you can compare the effects of market volatilities on CVW CLEANTECH and Huaneng Power 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 Huaneng Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and Huaneng Power.
Diversification Opportunities for CVW CLEANTECH and Huaneng Power
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between CVW and Huaneng is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and Huaneng Power International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaneng Power Intern 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 Huaneng Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaneng Power Intern has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and Huaneng Power go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and Huaneng Power
Assuming the 90 days trading horizon CVW CLEANTECH is expected to generate 2.9 times less return on investment than Huaneng Power. In addition to that, CVW CLEANTECH is 1.19 times more volatile than Huaneng Power International. It trades about 0.01 of its total potential returns per unit of risk. Huaneng Power International is currently generating about 0.04 per unit of volatility. If you would invest 28.00 in Huaneng Power International on October 13, 2024 and sell it today you would earn a total of 19.00 from holding Huaneng Power International or generate 67.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CLEANTECH INC vs. Huaneng Power International
Performance |
| Timeline |
| CVW CLEANTECH INC |
| Huaneng Power Intern |
CVW CLEANTECH and Huaneng Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and Huaneng Power
The main advantage of trading using opposite CVW CLEANTECH and Huaneng Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH position performs unexpectedly, Huaneng Power 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 Huaneng Power will offset losses from the drop in Huaneng Power's long position.| CVW CLEANTECH vs. Virtu Financial | CVW CLEANTECH vs. Direct Line Insurance | CVW CLEANTECH vs. Synovus Financial Corp | CVW CLEANTECH vs. United Insurance Holdings |
| Huaneng Power vs. Major Drilling Group | Huaneng Power vs. CVW CLEANTECH INC | Huaneng Power vs. Pembina Pipeline Corp | Huaneng Power vs. China BlueChemical |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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