Correlation Between Clean Vision and Carnegie Clean

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

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

Diversification Opportunities for Clean Vision and Carnegie Clean

-0.22

Correlation Coefficient

Clean Vision  Carnegie Clean

Very good diversification

The 3 months correlation between Clean and Carnegie is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Clean Vision Corp and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy and Clean Vision 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 Vision Corp are associated (or correlated) with Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of Clean Vision i.e., Clean Vision and Carnegie Clean go up and down completely randomly.

Pair Corralation between Clean Vision and Carnegie Clean

Given the investment horizon of 90 days Clean Vision Corp is expected to under-perform the Carnegie Clean. But the otc stock apears to be less risky and, when comparing its historical volatility, Clean Vision Corp is 2.56 times less risky than Carnegie Clean. The otc stock trades about -0.06 of its potential returns per unit of risk. The Carnegie Clean Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2.24  in Carnegie Clean Energy on November 29, 2024 and sell it today you would lose (0.14) from holding Carnegie Clean Energy or give up 6.25% of portfolio value over 90 days.

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

Clean Vision Corp  vs.  Carnegie Clean Energy

Clean Vision Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clean Vision Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Clean Vision is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Carnegie Clean Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carnegie Clean Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Carnegie Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clean Vision and Carnegie Clean

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

The idea behind Clean Vision Corp and Carnegie Clean Energy 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.