Correlation Between UGE International and Carnegie Clean

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

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

Diversification Opportunities for UGE International and Carnegie Clean

-0.01

Correlation Coefficient

UGE International  Carnegie Clean

Good diversification

The 3 months correlation between UGE and Carnegie is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding UGE International 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 UGE International 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 UGE International 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 UGE International i.e., UGE International and Carnegie Clean go up and down completely randomly.

Pair Corralation between UGE International and Carnegie Clean

If you would invest  2.30  in Carnegie Clean Energy on September 1, 2024 and sell it today you would earn a total of  0.37  from holding Carnegie Clean Energy or generate 16.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

UGE International  vs.  Carnegie Clean Energy

UGE International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UGE International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, UGE International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 UGE International and Carnegie Clean

The main advantage of trading using opposite UGE International and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UGE International 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 UGE International 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.