Correlation Between Clearway Energy and SolarWindow Technologies
Can any of the company-specific risk be diversified away by investing in both Clearway Energy and SolarWindow Technologies 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 SolarWindow Technologies 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 SolarWindow Technologies, you can compare the effects of market volatilities on Clearway Energy and SolarWindow Technologies 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 SolarWindow Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearway Energy and SolarWindow Technologies.
Diversification Opportunities for Clearway Energy and SolarWindow Technologies
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clearway and SolarWindow is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Clearway Energy Class and SolarWindow Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarWindow Technologies 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 SolarWindow Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarWindow Technologies has no effect on the direction of Clearway Energy i.e., Clearway Energy and SolarWindow Technologies go up and down completely randomly.
Pair Corralation between Clearway Energy and SolarWindow Technologies
Given the investment horizon of 90 days Clearway Energy is expected to generate 15.74 times less return on investment than SolarWindow Technologies. But when comparing it to its historical volatility, Clearway Energy Class is 7.75 times less risky than SolarWindow Technologies. It trades about 0.05 of its potential returns per unit of risk. SolarWindow Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 24.00 in SolarWindow Technologies on September 2, 2024 and sell it today you would earn a total of 8.00 from holding SolarWindow Technologies or generate 33.33% 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. SolarWindow Technologies
Performance |
| Timeline |
| Clearway Energy Class |
| SolarWindow Technologies |
Clearway Energy and SolarWindow Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearway Energy and SolarWindow Technologies
The main advantage of trading using opposite Clearway Energy and SolarWindow Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearway Energy position performs unexpectedly, SolarWindow Technologies 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 SolarWindow Technologies will offset losses from the drop in SolarWindow Technologies' 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 |
| SolarWindow Technologies vs. BCE Inc | SolarWindow Technologies vs. Axiologix | SolarWindow Technologies vs. Advanced Info Service | SolarWindow Technologies vs. HUMANA INC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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