Correlation Between CVW CLEANTECH and Intel

Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and Intel 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 Intel 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 Intel, you can compare the effects of market volatilities on CVW CLEANTECH and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and Intel.

Diversification Opportunities for CVW CLEANTECH and Intel

-0.18

Correlation Coefficient

CVW CLEANTECH  Intel

Good diversification

The 3 months correlation between CVW and Intel is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and Intel go up and down completely randomly.

Pair Corralation between CVW CLEANTECH and Intel

Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to under-perform the Intel. In addition to that, CVW CLEANTECH is 1.51 times more volatile than Intel. It trades about -0.01 of its total potential returns per unit of risk. Intel is currently generating about 0.01 per unit of volatility. If you would invest  1,930  in Intel on October 11, 2024 and sell it today you would lose (5.00) from holding Intel or give up 0.26% of portfolio value over 90 days.

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

CVW CLEANTECH INC  vs.  Intel

CVW CLEANTECH INC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CVW CLEANTECH INC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental indicators, CVW CLEANTECH reported solid returns over the last few months and may actually be approaching a breakup point.

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with CVW CLEANTECH and Intel

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

The idea behind CVW CLEANTECH INC and Intel 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.

Check out your portfolio center.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.