Correlation Between Clearway Energy and Innergex Renewable
Can any of the company-specific risk be diversified away by investing in both Clearway Energy and Innergex Renewable 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 Clearway Energy and Innergex Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearway Energy and Innergex Renewable Energy, you can compare the effects of market volatilities on Clearway Energy and Innergex Renewable 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 Clearway Energy with a short position of Innergex Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearway Energy and Innergex Renewable.
Diversification Opportunities for Clearway Energy and Innergex Renewable
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clearway and Innergex is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Clearway Energy and Innergex Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innergex Renewable Energy and Clearway 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 Clearway Energy are associated (or correlated) with Innergex Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innergex Renewable Energy has no effect on the direction of Clearway Energy i.e., Clearway Energy and Innergex Renewable go up and down completely randomly.
Pair Corralation between Clearway Energy and Innergex Renewable
Assuming the 90 days trading horizon Clearway Energy is expected to generate 0.5 times more return on investment than Innergex Renewable. However, Clearway Energy is 1.99 times less risky than Innergex Renewable. It trades about -0.02 of its potential returns per unit of risk. Innergex Renewable Energy is currently generating about -0.13 per unit of risk. If you would invest 2,485 in Clearway Energy on November 18, 2024 and sell it today you would lose (23.00) from holding Clearway Energy or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearway Energy vs. Innergex Renewable Energy
Performance |
| Timeline |
| Clearway Energy |
| Innergex Renewable Energy |
Clearway Energy and Innergex Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearway Energy and Innergex Renewable
The main advantage of trading using opposite Clearway Energy and Innergex Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearway Energy position performs unexpectedly, Innergex Renewable 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 Innergex Renewable will offset losses from the drop in Innergex Renewable's long position.| Clearway Energy vs. Brookfield Renewable Corp | Clearway Energy vs. Brookfield Renewable Partners | Clearway Energy vs. Clearway Energy Class | Clearway Energy vs. Orsted AS |
| Innergex Renewable vs. Orsted AS | Innergex Renewable vs. Clearway Energy | Innergex Renewable vs. Fusion Fuel Green | Innergex Renewable vs. Powertap Hydrogen Capital |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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