Correlation Between CVW CLEANTECH and Hemisphere Energy
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and Hemisphere Energy 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 Hemisphere Energy 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 Hemisphere Energy Corp, you can compare the effects of market volatilities on CVW CLEANTECH and Hemisphere Energy 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 Hemisphere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and Hemisphere Energy.
Diversification Opportunities for CVW CLEANTECH and Hemisphere Energy
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between CVW and Hemisphere is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and Hemisphere Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy Corp 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 Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy Corp has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and Hemisphere Energy go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and Hemisphere Energy
Assuming the 90 days trading horizon CVW CLEANTECH is expected to generate 1.48 times less return on investment than Hemisphere Energy. In addition to that, CVW CLEANTECH is 2.48 times more volatile than Hemisphere Energy Corp. It trades about 0.02 of its total potential returns per unit of risk. Hemisphere Energy Corp is currently generating about 0.07 per unit of volatility. If you would invest 70.00 in Hemisphere Energy Corp on November 8, 2024 and sell it today you would earn a total of 50.00 from holding Hemisphere Energy Corp or generate 71.43% 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. Hemisphere Energy Corp
Performance |
| Timeline |
| CVW CLEANTECH INC |
| Hemisphere Energy Corp |
CVW CLEANTECH and Hemisphere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and Hemisphere Energy
The main advantage of trading using opposite CVW CLEANTECH and Hemisphere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH position performs unexpectedly, Hemisphere Energy 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 Hemisphere Energy will offset losses from the drop in Hemisphere Energy's long position.| CVW CLEANTECH vs. RETAIL FOOD GROUP | CVW CLEANTECH vs. Ringmetall SE | CVW CLEANTECH vs. Calibre Mining Corp | CVW CLEANTECH vs. SPARTAN STORES |
| Hemisphere Energy vs. Addus HomeCare | Hemisphere Energy vs. Axfood AB | Hemisphere Energy vs. CN MODERN DAIRY | Hemisphere Energy vs. Tyson Foods |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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