Correlation Between C Bond and CN Energy

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

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

Diversification Opportunities for C Bond and CN Energy

0.33

Correlation Coefficient

C Bond  CN Energy

Weak diversification

The 3 months correlation between CBNT and CNEY is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding C Bond Systems and CN Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN Energy Group and C Bond 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 C Bond Systems are associated (or correlated) with CN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN Energy Group has no effect on the direction of C Bond i.e., C Bond and CN Energy go up and down completely randomly.

Pair Corralation between C Bond and CN Energy

Given the investment horizon of 90 days C Bond Systems is expected to generate 0.62 times more return on investment than CN Energy. However, C Bond Systems is 1.6 times less risky than CN Energy. It trades about 0.02 of its potential returns per unit of risk. CN Energy Group is currently generating about 0.01 per unit of risk. If you would invest  1.00  in C Bond Systems on September 7, 2024 and sell it today you would lose (0.90) from holding C Bond Systems or give up 90.0% of portfolio value over 90 days.

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

C Bond Systems  vs.  CN Energy Group

C Bond Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C Bond Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CN Energy Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CN Energy Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, CN Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with C Bond and CN Energy

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

The idea behind C Bond Systems and CN Energy Group 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.