Correlation Between Clearway Energy and Renew Energy
Can any of the company-specific risk be diversified away by investing in both Clearway Energy 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 Clearway Energy and Renew Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearway Energy and Renew Energy Global, you can compare the effects of market volatilities on Clearway Energy 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 Clearway Energy with a short position of Renew Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearway Energy and Renew Energy.
Diversification Opportunities for Clearway Energy and Renew Energy
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearway and Renew is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Clearway Energy 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 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 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 Clearway Energy i.e., Clearway Energy and Renew Energy go up and down completely randomly.
Pair Corralation between Clearway Energy and Renew Energy
Assuming the 90 days trading horizon Clearway Energy is expected to generate 19.4 times less return on investment than Renew Energy. But when comparing it to its historical volatility, Clearway Energy is 1.27 times less risky than Renew Energy. It trades about 0.01 of its potential returns per unit of risk. Renew Energy Global is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 596.00 in Renew Energy Global on October 26, 2024 and sell it today you would earn a total of 74.00 from holding Renew Energy Global or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearway Energy vs. Renew Energy Global
Performance |
| Timeline |
| Clearway Energy |
| Renew Energy Global |
Clearway Energy and Renew Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearway Energy and Renew Energy
The main advantage of trading using opposite Clearway Energy and Renew Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearway Energy 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.| Clearway Energy vs. Brookfield Renewable Corp | Clearway Energy vs. Nextera Energy Partners | Clearway Energy vs. Brookfield Renewable Partners | Clearway Energy vs. Clearway Energy Class |
| Renew Energy vs. Energy Vault Holdings | Renew Energy vs. Fluence Energy | Renew Energy vs. Altus Power | Renew Energy vs. Clearway Energy Class |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| CEOs Directory Screen CEOs from public companies around the world |