Correlation Between CVW CLEANTECH and La Franaise

Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and La Franaise 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 CVW CLEANTECH and La Franaise into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CVW CLEANTECH INC and La Franaise des, you can compare the effects of market volatilities on CVW CLEANTECH and La Franaise 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 CVW CLEANTECH with a short position of La Franaise. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and La Franaise.

Diversification Opportunities for CVW CLEANTECH and La Franaise

0.12

Correlation Coefficient

CVW CLEANTECH  La Franaise

Average diversification

The 3 months correlation between CVW and 1WE is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and La Franaise des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Franaise des and CVW CLEANTECH 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 CVW CLEANTECH INC are associated (or correlated) with La Franaise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Franaise des has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and La Franaise go up and down completely randomly.

Pair Corralation between CVW CLEANTECH and La Franaise

Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to under-perform the La Franaise. In addition to that, CVW CLEANTECH is 4.1 times more volatile than La Franaise des. It trades about -0.06 of its total potential returns per unit of risk. La Franaise des is currently generating about -0.06 per unit of volatility. If you would invest  3,722  in La Franaise des on October 6, 2024 and sell it today you would lose (40.00) from holding La Franaise des or give up 1.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

CVW CLEANTECH INC  vs.  La Franaise des

CVW CLEANTECH INC

Risk-Adjusted Performance

1 of 100

Weak

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

La Franaise des

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in La Franaise des are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, La Franaise may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CVW CLEANTECH and La Franaise

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

The idea behind CVW CLEANTECH INC and La Franaise des 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.