Correlation Between Atlantica Sustainable and ReNew Energy
Can any of the company-specific risk be diversified away by investing in both Atlantica Sustainable and ReNew 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 Atlantica Sustainable and ReNew Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantica Sustainable Infrastructure and ReNew Energy Global, you can compare the effects of market volatilities on Atlantica Sustainable and ReNew 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 Atlantica Sustainable with a short position of ReNew Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantica Sustainable and ReNew Energy.
Diversification Opportunities for Atlantica Sustainable and ReNew Energy
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Atlantica and ReNew is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Atlantica Sustainable Infrastr and ReNew Energy Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReNew Energy Global and Atlantica Sustainable 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 Atlantica Sustainable Infrastructure are associated (or correlated) with ReNew Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReNew Energy Global has no effect on the direction of Atlantica Sustainable i.e., Atlantica Sustainable and ReNew Energy go up and down completely randomly.
Pair Corralation between Atlantica Sustainable and ReNew Energy
Allowing for the 90-day total investment horizon Atlantica Sustainable is expected to generate 46.57 times less return on investment than ReNew Energy. But when comparing it to its historical volatility, Atlantica Sustainable Infrastructure is 231.31 times less risky than ReNew Energy. It trades about 0.57 of its potential returns per unit of risk. ReNew Energy Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 27.00 in ReNew Energy Global on August 28, 2024 and sell it today you would earn a total of 4.00 from holding ReNew Energy Global or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlantica Sustainable Infrastr vs. ReNew Energy Global
Performance |
| Timeline |
| Atlantica Sustainable |
| ReNew Energy Global |
Atlantica Sustainable and ReNew Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantica Sustainable and ReNew Energy
The main advantage of trading using opposite Atlantica Sustainable and ReNew Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantica Sustainable position performs unexpectedly, ReNew 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 ReNew Energy will offset losses from the drop in ReNew Energy's long position.| Atlantica Sustainable vs. Clearway Energy | Atlantica Sustainable vs. Brookfield Renewable Corp | Atlantica Sustainable vs. Nextera Energy Partners | Atlantica Sustainable vs. Brookfield Renewable Partners |
| ReNew Energy vs. Renew Energy Global | ReNew Energy vs. Xos Equity Warrants | ReNew Energy vs. Microvast Holdings | ReNew Energy vs. AEye 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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