Correlation Between Ecoloclean Industrs and Cleantech Power

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

By analyzing existing cross correlation between Ecoloclean Industrs and Cleantech Power Corp, you can compare the effects of market volatilities on Ecoloclean Industrs and Cleantech Power 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 Ecoloclean Industrs with a short position of Cleantech Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecoloclean Industrs and Cleantech Power.

Diversification Opportunities for Ecoloclean Industrs and Cleantech Power

0.0

Correlation Coefficient

Ecoloclean Industrs  Cleantech Power

Pay attention - limited upside

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

Pair Corralation between Ecoloclean Industrs and Cleantech Power

Given the investment horizon of 90 days Ecoloclean Industrs is expected to under-perform the Cleantech Power. But the stock apears to be less risky and, when comparing its historical volatility, Ecoloclean Industrs is 18.66 times less risky than Cleantech Power. The stock trades about -0.04 of its potential returns per unit of risk. The Cleantech Power Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5.64  in Cleantech Power Corp on October 3, 2024 and sell it today you would lose (5.05) from holding Cleantech Power Corp or give up 89.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Ecoloclean Industrs  vs.  Cleantech Power Corp

Ecoloclean Industrs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecoloclean Industrs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Ecoloclean Industrs is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Cleantech Power Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ecoloclean Industrs and Cleantech Power

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

The idea behind Ecoloclean Industrs and Cleantech Power 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.