Correlation Between Clearway Energy and Fusion Fuel
Can any of the company-specific risk be diversified away by investing in both Clearway Energy and Fusion Fuel 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 Fusion Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearway Energy Class and Fusion Fuel Green, you can compare the effects of market volatilities on Clearway Energy and Fusion Fuel 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 Fusion Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearway Energy and Fusion Fuel.
Diversification Opportunities for Clearway Energy and Fusion Fuel
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clearway and Fusion is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Clearway Energy Class and Fusion Fuel Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fusion Fuel Green 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 Class are associated (or correlated) with Fusion Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fusion Fuel Green has no effect on the direction of Clearway Energy i.e., Clearway Energy and Fusion Fuel go up and down completely randomly.
Pair Corralation between Clearway Energy and Fusion Fuel
Given the investment horizon of 90 days Clearway Energy Class is expected to generate 0.1 times more return on investment than Fusion Fuel. However, Clearway Energy Class is 10.01 times less risky than Fusion Fuel. It trades about 0.17 of its potential returns per unit of risk. Fusion Fuel Green is currently generating about 0.01 per unit of risk. If you would invest 2,617 in Clearway Energy Class on August 27, 2024 and sell it today you would earn a total of 253.00 from holding Clearway Energy Class or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearway Energy Class vs. Fusion Fuel Green
Performance |
| Timeline |
| Clearway Energy Class |
| Fusion Fuel Green |
Clearway Energy and Fusion Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearway Energy and Fusion Fuel
The main advantage of trading using opposite Clearway Energy and Fusion Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearway Energy position performs unexpectedly, Fusion Fuel 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 Fusion Fuel will offset losses from the drop in Fusion Fuel's long position.| Clearway Energy vs. Brookfield Renewable Corp | Clearway Energy vs. Clearway Energy | Clearway Energy vs. Nextera Energy Partners | Clearway Energy vs. Atlantica Sustainable Infrastructure |
| Fusion Fuel vs. Fusion Fuel Green | Fusion Fuel vs. Advent Technologies Holdings | Fusion Fuel vs. Eos Energy Enterprises | Fusion Fuel vs. CuriosityStream |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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