Correlation Between CVD Equipment and Canaan

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

By analyzing existing cross correlation between CVD Equipment and Canaan Inc, you can compare the effects of market volatilities on CVD Equipment and Canaan 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 CVD Equipment with a short position of Canaan. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVD Equipment and Canaan.

Diversification Opportunities for CVD Equipment and Canaan

0.0

Correlation Coefficient

CVD Equipment  Canaan

Pay attention - limited upside

The 3 months correlation between CVD and Canaan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CVD Equipment and Canaan Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaan Inc and CVD Equipment 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 CVD Equipment are associated (or correlated) with Canaan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaan Inc has no effect on the direction of CVD Equipment i.e., CVD Equipment and Canaan go up and down completely randomly.

Pair Corralation between CVD Equipment and Canaan

If you would invest  103.00  in Canaan Inc on October 4, 2024 and sell it today you would earn a total of  119.00  from holding Canaan Inc or generate 115.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

CVD Equipment  vs.  Canaan Inc

CVD Equipment

Risk-Adjusted Performance

0 of 100

Good

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

Canaan Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Canaan Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Canaan displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVD Equipment and Canaan

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

The idea behind CVD Equipment and Canaan Inc 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.