Correlation Between CGN Mining and CarsalesCom

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Can any of the company-specific risk be diversified away by investing in both CGN Mining and CarsalesCom 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 CGN Mining and CarsalesCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CGN Mining and CarsalesCom Ltd ADR, you can compare the effects of market volatilities on CGN Mining and CarsalesCom 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 CGN Mining with a short position of CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGN Mining and CarsalesCom.

Diversification Opportunities for CGN Mining and CarsalesCom

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between CGN Mining and CarsalesCom

If you would invest  4,601  in CarsalesCom Ltd ADR on December 28, 2023 and sell it today you would earn a total of  82.00  from holding CarsalesCom Ltd ADR or generate 1.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

CGN Mining  vs.  CarsalesCom Ltd ADR

 Performance 
       Timeline  
CGN Mining 

Risk-Adjusted Performance

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

Risk-Adjusted Performance

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Low
 
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Modest
Compared to the overall equity markets, risk-adjusted returns on investments in CarsalesCom Ltd ADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, CarsalesCom may actually be approaching a critical reversion point that can send shares even higher in April 2024.

CGN Mining and CarsalesCom Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CGN Mining and CarsalesCom

The main advantage of trading using opposite CGN Mining and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGN Mining position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom's long position.
The idea behind CGN Mining and CarsalesCom Ltd ADR 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.

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