Correlation Between Clean Carbon and Examobile

Can any of the company-specific risk be diversified away by investing in both Clean Carbon and Examobile 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 Clean Carbon and Examobile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clean Carbon Energy and Examobile SA, you can compare the effects of market volatilities on Clean Carbon and Examobile 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 Clean Carbon with a short position of Examobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Carbon and Examobile.

Diversification Opportunities for Clean Carbon and Examobile

-0.04

Correlation Coefficient

Clean Carbon  Examobile

Good diversification

The 3 months correlation between Clean and Examobile is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Clean Carbon Energy and Examobile SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Examobile SA and Clean Carbon 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 Clean Carbon Energy are associated (or correlated) with Examobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Examobile SA has no effect on the direction of Clean Carbon i.e., Clean Carbon and Examobile go up and down completely randomly.

Pair Corralation between Clean Carbon and Examobile

Assuming the 90 days trading horizon Clean Carbon Energy is expected to under-perform the Examobile. In addition to that, Clean Carbon is 1.66 times more volatile than Examobile SA. It trades about -0.12 of its total potential returns per unit of risk. Examobile SA is currently generating about 0.28 per unit of volatility. If you would invest  336.00  in Examobile SA on September 23, 2024 and sell it today you would earn a total of  24.00  from holding Examobile SA or generate 7.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	31.82%
Values	Daily Returns

Clean Carbon Energy  vs.  Examobile SA

Clean Carbon Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clean Carbon Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Examobile SA

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Examobile SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Examobile reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clean Carbon and Examobile

The main advantage of trading using opposite Clean Carbon and Examobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Carbon position performs unexpectedly, Examobile 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 Examobile will offset losses from the drop in Examobile's long position.

The idea behind Clean Carbon Energy and Examobile SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.