Correlation Between CVW CLEANTECH and TRIP GROUP

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

By analyzing existing cross correlation between CVW CLEANTECH INC and TRIPCOM GROUP DL 00125, you can compare the effects of market volatilities on CVW CLEANTECH and TRIP GROUP 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 TRIP GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and TRIP GROUP.

Diversification Opportunities for CVW CLEANTECH and TRIP GROUP

0.68

Correlation Coefficient

CVW CLEANTECH  TRIP GROUP

Poor diversification

The 3 months correlation between CVW and TRIP is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and TRIPCOM GROUP DL 00125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRIPCOM GROUP DL 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 INC are associated (or correlated) with TRIP GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRIPCOM GROUP DL has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and TRIP GROUP go up and down completely randomly.

Pair Corralation between CVW CLEANTECH and TRIP GROUP

Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to under-perform the TRIP GROUP. In addition to that, CVW CLEANTECH is 1.05 times more volatile than TRIPCOM GROUP DL 00125. It trades about -0.04 of its total potential returns per unit of risk. TRIPCOM GROUP DL 00125 is currently generating about -0.04 per unit of volatility. If you would invest  5,796  in TRIPCOM GROUP DL 00125 on May 18, 2025 and sell it today you would lose (586.00) from holding TRIPCOM GROUP DL 00125 or give up 10.11% of portfolio value over 90 days.

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

CVW CLEANTECH INC  vs.  TRIPCOM GROUP DL 00125

CVW CLEANTECH INC

Risk-Adjusted Performance

Weakest

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

TRIPCOM GROUP DL

Risk-Adjusted Performance

Weakest

Over the last 90 days TRIPCOM GROUP DL 00125 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CVW CLEANTECH and TRIP GROUP

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

The idea behind CVW CLEANTECH INC and TRIPCOM GROUP DL 00125 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.