Correlation Between CMG Cleantech and Hong Kong

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

By analyzing existing cross correlation between CMG Cleantech SA and Hong Kong Haiguan, you can compare the effects of market volatilities on CMG Cleantech and Hong Kong 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 CMG Cleantech with a short position of Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMG Cleantech and Hong Kong.

Diversification Opportunities for CMG Cleantech and Hong Kong

0.0

Correlation Coefficient

CMG Cleantech  Hong Kong

Pay attention - limited upside

The 3 months correlation between CMG and Hong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CMG Cleantech SA and Hong Kong Haiguan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Haiguan and CMG 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 CMG Cleantech SA are associated (or correlated) with Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Haiguan has no effect on the direction of CMG Cleantech i.e., CMG Cleantech and Hong Kong go up and down completely randomly.

Pair Corralation between CMG Cleantech and Hong Kong

If you would invest  120.00  in CMG Cleantech SA on September 4, 2024 and sell it today you would earn a total of  3.00  from holding CMG Cleantech SA or generate 2.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CMG Cleantech SA  vs.  Hong Kong Haiguan

CMG Cleantech SA

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CMG Cleantech SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, CMG Cleantech reported solid returns over the last few months and may actually be approaching a breakup point.

Hong Kong Haiguan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hong Kong Haiguan has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Hong Kong is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with CMG Cleantech and Hong Kong

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

The idea behind CMG Cleantech SA and Hong Kong Haiguan 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.