Correlation Between Apple and CLEAN ENERGY
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and CLEAN ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and CLEAN ENERGY FUELS, you can compare the effects of market volatilities on Apple 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 Apple with a short position of CLEAN ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and CLEAN ENERGY.
Diversification Opportunities for Apple and CLEAN ENERGY
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and CLEAN is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and CLEAN ENERGY go up and down completely randomly.
Pair Corralation between Apple and CLEAN ENERGY
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.39 times more return on investment than CLEAN ENERGY. However, Apple Inc is 2.58 times less risky than CLEAN ENERGY. It trades about 0.09 of its potential returns per unit of risk. CLEAN ENERGY FUELS is currently generating about -0.02 per unit of risk. If you would invest 14,073 in Apple Inc on October 10, 2024 and sell it today you would earn a total of 9,342 from holding Apple Inc or generate 66.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. CLEAN ENERGY FUELS
Performance |
| Timeline |
| Apple Inc |
| CLEAN ENERGY FUELS |
Apple and CLEAN ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and CLEAN ENERGY
The main advantage of trading using opposite Apple and CLEAN ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Algonquin Power Utilities | Apple vs. Singapore Telecommunications Limited | Apple vs. Geely Automobile Holdings | Apple vs. Casio Computer CoLtd |
| CLEAN ENERGY vs. Broadridge Financial Solutions | CLEAN ENERGY vs. Haier Smart Home | CLEAN ENERGY vs. Taylor Morrison Home | CLEAN ENERGY vs. The Home Depot |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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