Correlation Between Astra Energy and Carnegie Clean

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

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

Diversification Opportunities for Astra Energy and Carnegie Clean

0.42

Correlation Coefficient

Astra Energy  Carnegie Clean

Very weak diversification

The 3 months correlation between Astra and Carnegie is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Astra Energy 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 Astra Energy 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 Astra Energy 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 Astra Energy i.e., Astra Energy and Carnegie Clean go up and down completely randomly.

Pair Corralation between Astra Energy and Carnegie Clean

Given the investment horizon of 90 days Astra Energy is expected to generate 10.46 times less return on investment than Carnegie Clean. But when comparing it to its historical volatility, Astra Energy is 1.63 times less risky than Carnegie Clean. It trades about 0.01 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2.53  in Carnegie Clean Energy on September 3, 2024 and sell it today you would earn a total of  0.14  from holding Carnegie Clean Energy or generate 5.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Astra Energy  vs.  Carnegie Clean Energy

Astra Energy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Carnegie Clean Energy

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Carnegie Clean Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Carnegie Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astra Energy and Carnegie Clean

The main advantage of trading using opposite Astra Energy and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Energy 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 Astra Energy 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.