Correlation Between Carnegie Clean and Eco Wave

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

Diversification Opportunities for Carnegie Clean and Eco Wave

-0.31

Correlation Coefficient

Carnegie Clean  Eco Wave

Very good diversification

The 3 months correlation between Carnegie and Eco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Eco Wave Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Wave Power 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 Eco Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Wave Power has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Eco Wave go up and down completely randomly.

Pair Corralation between Carnegie Clean and Eco Wave

Assuming the 90 days horizon Carnegie Clean is expected to generate 3.84 times less return on investment than Eco Wave. But when comparing it to its historical volatility, Carnegie Clean Energy is 1.09 times less risky than Eco Wave. It trades about 0.05 of its potential returns per unit of risk. Eco Wave Power is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  592.00  in Eco Wave Power on September 28, 2024 and sell it today you would earn a total of  808.00  from holding Eco Wave Power or generate 136.49% return on investment over 90 days.

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

Carnegie Clean Energy  vs.  Eco Wave Power

Carnegie Clean Energy

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carnegie Clean Energy are ranked lower than 3 (%) 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.

Eco Wave Power

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Carnegie Clean and Eco Wave

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

The idea behind Carnegie Clean Energy and Eco Wave Power 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.