Correlation Between Altus Power and Tidewater Renewables
Can any of the company-specific risk be diversified away by investing in both Altus Power and Tidewater Renewables 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 Altus Power and Tidewater Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altus Power and Tidewater Renewables, you can compare the effects of market volatilities on Altus Power and Tidewater Renewables 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 Altus Power with a short position of Tidewater Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altus Power and Tidewater Renewables.
Diversification Opportunities for Altus Power and Tidewater Renewables
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Altus and Tidewater is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Altus Power and Tidewater Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidewater Renewables and Altus Power 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 Altus Power are associated (or correlated) with Tidewater Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidewater Renewables has no effect on the direction of Altus Power i.e., Altus Power and Tidewater Renewables go up and down completely randomly.
Pair Corralation between Altus Power and Tidewater Renewables
Given the investment horizon of 90 days Altus Power is expected to generate 0.8 times more return on investment than Tidewater Renewables. However, Altus Power is 1.25 times less risky than Tidewater Renewables. It trades about 0.17 of its potential returns per unit of risk. Tidewater Renewables is currently generating about -0.27 per unit of risk. If you would invest 344.00 in Altus Power on September 1, 2024 and sell it today you would earn a total of 88.00 from holding Altus Power or generate 25.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altus Power vs. Tidewater Renewables
Performance |
| Timeline |
| Altus Power |
| Tidewater Renewables |
Altus Power and Tidewater Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altus Power and Tidewater Renewables
The main advantage of trading using opposite Altus Power and Tidewater Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Power position performs unexpectedly, Tidewater Renewables 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 Tidewater Renewables will offset losses from the drop in Tidewater Renewables' long position.| Altus Power vs. Ormat Technologies | Altus Power vs. Enlight Renewable Energy | Altus Power vs. Fluence Energy | Altus Power vs. Renew Energy Global |
| Tidewater Renewables vs. Constellation Energy Corp | Tidewater Renewables vs. Orsted AS ADR | Tidewater Renewables vs. HUMANA INC | Tidewater Renewables vs. Aquagold International |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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