Correlation Between CVW CLEANTECH and CSL

Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and CSL 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 CSL 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 CSL Limited, you can compare the effects of market volatilities on CVW CLEANTECH and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and CSL.

Diversification Opportunities for CVW CLEANTECH and CSL

0.3

Correlation Coefficient

CVW CLEANTECH  CSL

Weak diversification

The 3 months correlation between CVW and CSL is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and CSL go up and down completely randomly.

Pair Corralation between CVW CLEANTECH and CSL

Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to generate 1.37 times more return on investment than CSL. However, CVW CLEANTECH is 1.37 times more volatile than CSL Limited. It trades about -0.03 of its potential returns per unit of risk. CSL Limited is currently generating about -0.09 per unit of risk. If you would invest  65.00  in CVW CLEANTECH INC on May 28, 2025 and sell it today you would lose (6.00) from holding CVW CLEANTECH INC or give up 9.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

CVW CLEANTECH INC  vs.  CSL Limited

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 fragile 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.

CSL Limited

Risk-Adjusted Performance

Weakest

Over the last 90 days CSL Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CVW CLEANTECH and CSL

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

The idea behind CVW CLEANTECH INC and CSL Limited 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.