Correlation Between CVW CleanTech and Custom Truck

Can any of the company-specific risk be diversified away by investing in both CVW CleanTech and Custom Truck 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 CVW CleanTech and Custom Truck into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CVW CleanTech and Custom Truck One, you can compare the effects of market volatilities on CVW CleanTech and Custom Truck 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 CVW CleanTech with a short position of Custom Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and Custom Truck.

Diversification Opportunities for CVW CleanTech and Custom Truck

-0.29

Correlation Coefficient

CVW CleanTech  Custom Truck

Very good diversification

The 3 months correlation between CVW and Custom is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One and CVW 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 CVW CleanTech are associated (or correlated) with Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of CVW CleanTech i.e., CVW CleanTech and Custom Truck go up and down completely randomly.

Pair Corralation between CVW CleanTech and Custom Truck

Assuming the 90 days horizon CVW CleanTech is expected to under-perform the Custom Truck. But the otc stock apears to be less risky and, when comparing its historical volatility, CVW CleanTech is 1.02 times less risky than Custom Truck. The otc stock trades about -0.05 of its potential returns per unit of risk. The Custom Truck One is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  437.00  in Custom Truck One on May 21, 2025 and sell it today you would earn a total of  177.00  from holding Custom Truck One or generate 40.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CVW CleanTech  vs.  Custom Truck One

CVW CleanTech

Risk-Adjusted Performance

Weakest

Over the last 90 days CVW CleanTech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Custom Truck One

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Custom Truck One are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Custom Truck unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVW CleanTech and Custom Truck

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

The idea behind CVW CleanTech and Custom Truck One 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.