Correlation Between Carnegie Clean and Publity AG

Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and Publity AG 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 Publity AG 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 Publity AG, you can compare the effects of market volatilities on Carnegie Clean and Publity AG 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 Publity AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and Publity AG.

Diversification Opportunities for Carnegie Clean and Publity AG

0.23

Correlation Coefficient

Carnegie Clean  Publity AG

Modest diversification

The 3 months correlation between Carnegie and Publity is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Publity AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Publity 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 Publity AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Publity AG has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Publity AG go up and down completely randomly.

Pair Corralation between Carnegie Clean and Publity AG

Assuming the 90 days trading horizon Carnegie Clean Energy is expected to under-perform the Publity AG. But the stock apears to be less risky and, when comparing its historical volatility, Carnegie Clean Energy is 3.17 times less risky than Publity AG. The stock trades about -0.02 of its potential returns per unit of risk. The Publity AG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Publity AG on December 23, 2024 and sell it today you would lose (14.00) from holding Publity AG or give up 40.0% of portfolio value over 90 days.

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

Carnegie Clean Energy  vs.  Publity AG

Carnegie Clean Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carnegie Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Publity AG

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Publity AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Publity AG unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carnegie Clean and Publity AG

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

The idea behind Carnegie Clean Energy and Publity 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.