Correlation Between Constellation Energy and Atlantic Wind
Can any of the company-specific risk be diversified away by investing in both Constellation Energy and Atlantic Wind 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 Constellation Energy and Atlantic Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellation Energy Corp and Atlantic Wind Solar, you can compare the effects of market volatilities on Constellation Energy and Atlantic Wind 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 Constellation Energy with a short position of Atlantic Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Energy and Atlantic Wind.
Diversification Opportunities for Constellation Energy and Atlantic Wind
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Constellation and Atlantic is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Energy Corp and Atlantic Wind Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Wind Solar and Constellation Energy 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 Constellation Energy Corp are associated (or correlated) with Atlantic Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Wind Solar has no effect on the direction of Constellation Energy i.e., Constellation Energy and Atlantic Wind go up and down completely randomly.
Pair Corralation between Constellation Energy and Atlantic Wind
Considering the 90-day investment horizon Constellation Energy Corp is expected to generate 0.51 times more return on investment than Atlantic Wind. However, Constellation Energy Corp is 1.95 times less risky than Atlantic Wind. It trades about 0.16 of its potential returns per unit of risk. Atlantic Wind Solar is currently generating about -0.06 per unit of risk. If you would invest 17,750 in Constellation Energy Corp on August 31, 2024 and sell it today you would earn a total of 7,589 from holding Constellation Energy Corp or generate 42.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Constellation Energy Corp vs. Atlantic Wind Solar
Performance |
| Timeline |
| Constellation Energy Corp |
| Atlantic Wind Solar |
Constellation Energy and Atlantic Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Energy and Atlantic Wind
The main advantage of trading using opposite Constellation Energy and Atlantic Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Energy position performs unexpectedly, Atlantic Wind 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 Atlantic Wind will offset losses from the drop in Atlantic Wind's long position.| Constellation Energy vs. Atlantica Sustainable Infrastructure | Constellation Energy vs. Clearway Energy | Constellation Energy vs. Brookfield Renewable Corp | Constellation Energy vs. Nextera Energy Partners |
| Atlantic Wind vs. Green Stream Holdings | Atlantic Wind vs. VirExit Technologies | Atlantic Wind vs. Clean Vision Corp | Atlantic Wind vs. SolarWindow 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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