Correlation Between Pengana Private and Carnegie Clean

Can any of the company-specific risk be diversified away by investing in both Pengana Private and Carnegie Clean 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 Pengana Private and Carnegie Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pengana Private Equity and Carnegie Clean Energy, you can compare the effects of market volatilities on Pengana Private and Carnegie Clean 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 Pengana Private with a short position of Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengana Private and Carnegie Clean.

Diversification Opportunities for Pengana Private and Carnegie Clean

-0.47

Correlation Coefficient

Pengana Private  Carnegie Clean

Very good diversification

The 3 months correlation between Pengana and Carnegie is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Pengana Private Equity and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy and Pengana Private 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 Pengana Private Equity are associated (or correlated) with Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of Pengana Private i.e., Pengana Private and Carnegie Clean go up and down completely randomly.

Pair Corralation between Pengana Private and Carnegie Clean

Assuming the 90 days trading horizon Pengana Private Equity is expected to generate 0.76 times more return on investment than Carnegie Clean. However, Pengana Private Equity is 1.31 times less risky than Carnegie Clean. It trades about 0.09 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about 0.01 per unit of risk. If you would invest  114.00  in Pengana Private Equity on November 28, 2024 and sell it today you would earn a total of  17.00  from holding Pengana Private Equity or generate 14.91% return on investment over 90 days.

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

Pengana Private Equity  vs.  Carnegie Clean Energy

Pengana Private Equity

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pengana Private Equity are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Pengana Private unveiled solid returns over the last few months and may actually be approaching a breakup point.

Carnegie Clean Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carnegie Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Carnegie Clean is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Pengana Private and Carnegie Clean

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

The idea behind Pengana Private Equity and Carnegie Clean Energy 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.