Correlation Between Capital Clean and Summit Midstream
Can any of the company-specific risk be diversified away by investing in both Capital Clean and Summit Midstream 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 Capital Clean and Summit Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Clean Energy and Summit Midstream, you can compare the effects of market volatilities on Capital Clean and Summit Midstream 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 Capital Clean with a short position of Summit Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and Summit Midstream.
Diversification Opportunities for Capital Clean and Summit Midstream
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and Summit is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and Summit Midstream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Midstream and Capital Clean 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 Capital Clean Energy are associated (or correlated) with Summit Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Midstream has no effect on the direction of Capital Clean i.e., Capital Clean and Summit Midstream go up and down completely randomly.
Pair Corralation between Capital Clean and Summit Midstream
Given the investment horizon of 90 days Capital Clean is expected to generate 1.88 times less return on investment than Summit Midstream. But when comparing it to its historical volatility, Capital Clean Energy is 1.74 times less risky than Summit Midstream. It trades about 0.17 of its potential returns per unit of risk. Summit Midstream is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,787 in Summit Midstream on November 5, 2024 and sell it today you would earn a total of 367.00 from holding Summit Midstream or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Clean Energy vs. Summit Midstream
Performance |
| Timeline |
| Capital Clean Energy |
| Summit Midstream |
Capital Clean and Summit Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Clean and Summit Midstream
The main advantage of trading using opposite Capital Clean and Summit Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Clean position performs unexpectedly, Summit Midstream 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 Summit Midstream will offset losses from the drop in Summit Midstream's long position.| Capital Clean vs. Asure Software | Capital Clean vs. NETGEAR | Capital Clean vs. Amkor Technology | Capital Clean vs. Datadog |
| Summit Midstream vs. Sonida Senior Living | Summit Midstream vs. Catalyst Pharmaceuticals | Summit Midstream vs. Cardinal Health | Summit Midstream vs. Aduro Clean Technologies |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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