Correlation Between BROADWIND ENRGY and Clean Energy
Can any of the company-specific risk be diversified away by investing in both BROADWIND ENRGY 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 BROADWIND ENRGY and Clean Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADWIND ENRGY and Clean Energy Fuels, you can compare the effects of market volatilities on BROADWIND ENRGY 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 BROADWIND ENRGY with a short position of Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADWIND ENRGY and Clean Energy.
Diversification Opportunities for BROADWIND ENRGY and Clean Energy
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between BROADWIND and Clean is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding BROADWIND ENRGY 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 BROADWIND ENRGY 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 BROADWIND ENRGY 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 BROADWIND ENRGY i.e., BROADWIND ENRGY and Clean Energy go up and down completely randomly.
Pair Corralation between BROADWIND ENRGY and Clean Energy
Assuming the 90 days trading horizon BROADWIND ENRGY is expected to generate 1.12 times less return on investment than Clean Energy. In addition to that, BROADWIND ENRGY is 1.06 times more volatile than Clean Energy Fuels. It trades about 0.13 of its total potential returns per unit of risk. Clean Energy Fuels is currently generating about 0.16 per unit of volatility. If you would invest 268.00 in Clean Energy Fuels on October 12, 2024 and sell it today you would earn a total of 24.00 from holding Clean Energy Fuels or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BROADWIND ENRGY vs. Clean Energy Fuels
Performance |
| Timeline |
| BROADWIND ENRGY |
| Clean Energy Fuels |
BROADWIND ENRGY and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADWIND ENRGY and Clean Energy
The main advantage of trading using opposite BROADWIND ENRGY and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADWIND ENRGY 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.| BROADWIND ENRGY vs. Nok Airlines PCL | BROADWIND ENRGY vs. InterContinental Hotels Group | BROADWIND ENRGY vs. Singapore Airlines Limited | BROADWIND ENRGY vs. Xenia Hotels Resorts |
| Clean Energy vs. SERI INDUSTRIAL EO | Clean Energy vs. PLAYSTUDIOS A DL 0001 | Clean Energy vs. PLAY2CHILL SA ZY | Clean Energy vs. Zijin Mining Group |
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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