Correlation Between CVW CLEANTECH and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL, you can compare the effects of market volatilities on CVW CLEANTECH and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and KINGBOARD CHEMICAL.
Diversification Opportunities for CVW CLEANTECH and KINGBOARD CHEMICAL
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between CVW and KINGBOARD is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and KINGBOARD CHEMICAL
Assuming the 90 days trading horizon CVW CLEANTECH is expected to generate 2.38 times less return on investment than KINGBOARD CHEMICAL. In addition to that, CVW CLEANTECH is 1.27 times more volatile than KINGBOARD CHEMICAL. It trades about 0.02 of its total potential returns per unit of risk. KINGBOARD CHEMICAL is currently generating about 0.05 per unit of volatility. If you would invest 146.00 in KINGBOARD CHEMICAL on October 28, 2024 and sell it today you would earn a total of 110.00 from holding KINGBOARD CHEMICAL or generate 75.34% 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. KINGBOARD CHEMICAL
Performance |
| Timeline |
| CVW CLEANTECH INC |
| KINGBOARD CHEMICAL |
CVW CLEANTECH and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and KINGBOARD CHEMICAL
The main advantage of trading using opposite CVW CLEANTECH and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL's long position.| CVW CLEANTECH vs. Zoom Video Communications | CVW CLEANTECH vs. Chunghwa Telecom Co | CVW CLEANTECH vs. TELECOM ITALIA | CVW CLEANTECH vs. Ribbon Communications |
| KINGBOARD CHEMICAL vs. SAFEROADS HLDGS | KINGBOARD CHEMICAL vs. EVS Broadcast Equipment | KINGBOARD CHEMICAL vs. Liberty Broadband | KINGBOARD CHEMICAL vs. TRAINLINE PLC LS |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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