Correlation Between Haier Smart and CLEAN ENERGY
Can any of the company-specific risk be diversified away by investing in both Haier Smart and CLEAN ENERGY 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 Haier Smart and CLEAN ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haier Smart Home and CLEAN ENERGY FUELS, you can compare the effects of market volatilities on Haier Smart and CLEAN ENERGY 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 Haier Smart with a short position of CLEAN ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and CLEAN ENERGY.
Diversification Opportunities for Haier Smart and CLEAN ENERGY
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haier and CLEAN is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and CLEAN ENERGY FUELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEAN ENERGY FUELS and Haier Smart 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 Haier Smart Home are associated (or correlated) with CLEAN ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEAN ENERGY FUELS has no effect on the direction of Haier Smart i.e., Haier Smart and CLEAN ENERGY go up and down completely randomly.
Pair Corralation between Haier Smart and CLEAN ENERGY
Assuming the 90 days trading horizon Haier Smart is expected to generate 3.06 times less return on investment than CLEAN ENERGY. But when comparing it to its historical volatility, Haier Smart Home is 1.93 times less risky than CLEAN ENERGY. It trades about 0.12 of its potential returns per unit of risk. CLEAN ENERGY FUELS is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 260.00 in CLEAN ENERGY FUELS on October 10, 2024 and sell it today you would earn a total of 28.00 from holding CLEAN ENERGY FUELS or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. CLEAN ENERGY FUELS
Performance |
| Timeline |
| Haier Smart Home |
| CLEAN ENERGY FUELS |
Haier Smart and CLEAN ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and CLEAN ENERGY
The main advantage of trading using opposite Haier Smart and CLEAN ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, CLEAN ENERGY 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 CLEAN ENERGY will offset losses from the drop in CLEAN ENERGY's long position.| Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc |
| CLEAN ENERGY vs. HOCHSCHILD MINING | CLEAN ENERGY vs. OURGAME INTHOLDL 00005 | CLEAN ENERGY vs. Plastic Omnium | CLEAN ENERGY vs. QINGCI GAMES INC |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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