Correlation Between Endocan Corp and Cleantech Biofuels

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

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

Diversification Opportunities for Endocan Corp and Cleantech Biofuels

0.0

Correlation Coefficient

Endocan Corp  Cleantech Biofuels

Pay attention - limited upside

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

Pair Corralation between Endocan Corp and Cleantech Biofuels

If you would invest  0.01  in Endocan Corp on December 27, 2024 and sell it today you would earn a total of  0.00  from holding Endocan Corp or generate 0.0% return on investment over 90 days.

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

Endocan Corp  vs.  Cleantech Biofuels

Endocan Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endocan Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Endocan Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Cleantech Biofuels

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Endocan Corp and Cleantech Biofuels

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

The idea behind Endocan Corp and Cleantech Biofuels 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.