Correlation Between Carnegie Clean and Easy Software

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

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

Diversification Opportunities for Carnegie Clean and Easy Software

-0.26

Correlation Coefficient

Carnegie Clean  Easy Software

Very good diversification

The 3 months correlation between Carnegie and Easy is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Easy Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easy Software AG and Carnegie 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 Carnegie Clean Energy are associated (or correlated) with Easy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easy Software AG has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Easy Software go up and down completely randomly.

Pair Corralation between Carnegie Clean and Easy Software

Assuming the 90 days trading horizon Carnegie Clean Energy is expected to generate 2.91 times more return on investment than Easy Software. However, Carnegie Clean is 2.91 times more volatile than Easy Software AG. It trades about 0.01 of its potential returns per unit of risk. Easy Software AG is currently generating about 0.03 per unit of risk. If you would invest  5.00  in Carnegie Clean Energy on October 11, 2024 and sell it today you would lose (2.88) from holding Carnegie Clean Energy or give up 57.6% of portfolio value over 90 days.

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

Carnegie Clean Energy  vs.  Easy Software AG

Carnegie Clean Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carnegie Clean Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Carnegie Clean is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Easy Software AG

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Easy Software AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Easy Software displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carnegie Clean and Easy Software

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

The idea behind Carnegie Clean Energy and Easy Software AG 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.