Correlation Between CAMDEN and CleanGo Innovations

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

By analyzing existing cross correlation between CAMDEN PPTY TR and CleanGo Innovations, you can compare the effects of market volatilities on CAMDEN and CleanGo Innovations 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 CAMDEN with a short position of CleanGo Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAMDEN and CleanGo Innovations.

Diversification Opportunities for CAMDEN and CleanGo Innovations

-0.15

Correlation Coefficient

CAMDEN  CleanGo Innovations

Good diversification

The 3 months correlation between CAMDEN and CleanGo is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CAMDEN PPTY TR and CleanGo Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanGo Innovations and CAMDEN 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 CAMDEN PPTY TR are associated (or correlated) with CleanGo Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanGo Innovations has no effect on the direction of CAMDEN i.e., CAMDEN and CleanGo Innovations go up and down completely randomly.

Pair Corralation between CAMDEN and CleanGo Innovations

Assuming the 90 days trading horizon CAMDEN is expected to generate 1463.69 times less return on investment than CleanGo Innovations. But when comparing it to its historical volatility, CAMDEN PPTY TR is 85.78 times less risky than CleanGo Innovations. It trades about 0.0 of its potential returns per unit of risk. CleanGo Innovations is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  32.00  in CleanGo Innovations on December 23, 2024 and sell it today you would lose (20.00) from holding CleanGo Innovations or give up 62.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

CAMDEN PPTY TR  vs.  CleanGo Innovations

CAMDEN PPTY TR

Risk-Adjusted Performance

Very Weak

Over the last 90 days CAMDEN PPTY TR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CAMDEN is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

CleanGo Innovations

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CleanGo Innovations are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CleanGo Innovations reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CAMDEN and CleanGo Innovations

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

The idea behind CAMDEN PPTY TR and CleanGo Innovations 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.