Correlation Between Nextera Energy and Azure Power
Can any of the company-specific risk be diversified away by investing in both Nextera Energy and Azure Power 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 Nextera Energy and Azure Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextera Energy Partners and Azure Power Global, you can compare the effects of market volatilities on Nextera Energy and Azure Power 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 Nextera Energy with a short position of Azure Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextera Energy and Azure Power.
Diversification Opportunities for Nextera Energy and Azure Power
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nextera and Azure is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nextera Energy Partners and Azure Power Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azure Power Global and Nextera 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 Nextera Energy Partners are associated (or correlated) with Azure Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azure Power Global has no effect on the direction of Nextera Energy i.e., Nextera Energy and Azure Power go up and down completely randomly.
Pair Corralation between Nextera Energy and Azure Power
If you would invest 34.00 in Azure Power Global on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Azure Power Global or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.4% |
| Values | Daily Returns |
Nextera Energy Partners vs. Azure Power Global
Performance |
| Timeline |
| Nextera Energy Partners |
| Azure Power Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nextera Energy and Azure Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextera Energy and Azure Power
The main advantage of trading using opposite Nextera Energy and Azure Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextera Energy position performs unexpectedly, Azure Power 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 Azure Power will offset losses from the drop in Azure Power's long position.| Nextera Energy vs. Brookfield Renewable Corp | Nextera Energy vs. Algonquin Power Utilities | Nextera Energy vs. Clearway Energy Class | Nextera Energy vs. Atlantica Sustainable Infrastructure |
| Azure Power vs. Altus Power | Azure Power vs. Ormat Technologies | Azure Power vs. Enlight Renewable Energy | Azure Power vs. Fluence Energy |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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