Correlation Between EvoAir Holdings and CVW CleanTech

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Can any of the company-specific risk be diversified away by investing in both EvoAir Holdings and CVW CleanTech 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 EvoAir Holdings and CVW CleanTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EvoAir Holdings and CVW CleanTech, you can compare the effects of market volatilities on EvoAir Holdings and CVW CleanTech 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 EvoAir Holdings with a short position of CVW CleanTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of EvoAir Holdings and CVW CleanTech.

Diversification Opportunities for EvoAir Holdings and CVW CleanTech

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between EvoAir Holdings and CVW CleanTech

Assuming the 90 days horizon EvoAir Holdings is expected to generate 18.81 times less return on investment than CVW CleanTech. But when comparing it to its historical volatility, EvoAir Holdings is 33.4 times less risky than CVW CleanTech. It trades about 0.05 of its potential returns per unit of risk. CVW CleanTech is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  70.00  in CVW CleanTech on October 5, 2024 and sell it today you would lose (8.00) from holding CVW CleanTech or give up 11.43% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy98.74%
ValuesDaily Returns

EvoAir Holdings  vs.  CVW CleanTech

 Performance 
       Timeline  
EvoAir Holdings 

Risk-Adjusted Performance

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Over the last 90 days EvoAir Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, EvoAir Holdings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
CVW CleanTech 

Risk-Adjusted Performance

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Compared to the overall equity markets, risk-adjusted returns on investments in CVW CleanTech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

EvoAir Holdings and CVW CleanTech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EvoAir Holdings and CVW CleanTech

The main advantage of trading using opposite EvoAir Holdings and CVW CleanTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EvoAir Holdings position performs unexpectedly, CVW CleanTech 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 CVW CleanTech will offset losses from the drop in CVW CleanTech's long position.
The idea behind EvoAir Holdings and CVW CleanTech 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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