Correlation Between Carnegie Clean and Clean Vision

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

Diversification Opportunities for Carnegie Clean and Clean Vision

-0.05

Correlation Coefficient

Carnegie Clean  Clean Vision

Good diversification

The 3 months correlation between Carnegie and Clean is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Clean Vision Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Vision Corp 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 Clean Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Vision Corp has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Clean Vision go up and down completely randomly.

Pair Corralation between Carnegie Clean and Clean Vision

Assuming the 90 days horizon Carnegie Clean Energy is expected to generate 2.78 times more return on investment than Clean Vision. However, Carnegie Clean is 2.78 times more volatile than Clean Vision Corp. It trades about 0.11 of its potential returns per unit of risk. Clean Vision Corp is currently generating about 0.06 per unit of risk. If you would invest  2.07  in Carnegie Clean Energy on December 29, 2024 and sell it today you would earn a total of  0.48  from holding Carnegie Clean Energy or generate 23.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Carnegie Clean Energy  vs.  Clean Vision Corp

Carnegie Clean Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carnegie Clean Energy are ranked lower than 8 (%) 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.

Clean Vision Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Vision Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Clean Vision showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carnegie Clean and Clean Vision

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

The idea behind Carnegie Clean Energy and Clean Vision Corp 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.