Correlation Between Capital Clean and Able View

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

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

Diversification Opportunities for Capital Clean and Able View

0.19

Correlation Coefficient

Capital Clean  Able View

Average diversification

The 3 months correlation between Capital and Able is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and Able View Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Able View Global and Capital Clean 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 Capital Clean Energy are associated (or correlated) with Able View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Able View Global has no effect on the direction of Capital Clean i.e., Capital Clean and Able View go up and down completely randomly.

Pair Corralation between Capital Clean and Able View

Given the investment horizon of 90 days Capital Clean Energy is expected to under-perform the Able View. But the stock apears to be less risky and, when comparing its historical volatility, Capital Clean Energy is 4.45 times less risky than Able View. The stock trades about -0.02 of its potential returns per unit of risk. The Able View Global is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Able View Global on October 26, 2024 and sell it today you would earn a total of  19.00  from holding Able View Global or generate 21.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Capital Clean Energy  vs.  Able View Global

Capital Clean Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Capital Clean is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Able View Global

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Able View Global are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Able View showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capital Clean and Able View

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

The idea behind Capital Clean Energy and Able View Global 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.