Correlation Between CVW CleanTech and YXTCOM GROUP

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

By analyzing existing cross correlation between CVW CleanTech and YXTCOM GROUP HOLDING, you can compare the effects of market volatilities on CVW CleanTech and YXTCOM GROUP 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 CVW CleanTech with a short position of YXTCOM GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and YXTCOM GROUP.

Diversification Opportunities for CVW CleanTech and YXTCOM GROUP

-0.03

Correlation Coefficient

CVW CleanTech  YXTCOM GROUP

Good diversification

The 3 months correlation between CVW and YXTCOM is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech and YXTCOM GROUP HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YXTCOM GROUP HOLDING and CVW CleanTech 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 CVW CleanTech are associated (or correlated) with YXTCOM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YXTCOM GROUP HOLDING has no effect on the direction of CVW CleanTech i.e., CVW CleanTech and YXTCOM GROUP go up and down completely randomly.

Pair Corralation between CVW CleanTech and YXTCOM GROUP

Assuming the 90 days horizon CVW CleanTech is expected to generate 1.0 times more return on investment than YXTCOM GROUP. However, CVW CleanTech is 1.0 times less risky than YXTCOM GROUP. It trades about 0.05 of its potential returns per unit of risk. YXTCOM GROUP HOLDING is currently generating about -0.13 per unit of risk. If you would invest  42.00  in CVW CleanTech on October 22, 2024 and sell it today you would earn a total of  16.00  from holding CVW CleanTech or generate 38.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.58%
Values	Daily Returns

CVW CleanTech  vs.  YXTCOM GROUP HOLDING

CVW CleanTech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CVW CleanTech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, CVW CleanTech is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

YXTCOM GROUP HOLDING

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YXTCOM GROUP HOLDING are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, YXTCOM GROUP may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CVW CleanTech and YXTCOM GROUP

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

The idea behind CVW CleanTech and YXTCOM GROUP HOLDING 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.