Correlation Between Clearway Energy and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Clearway Energy and Quaker Chemical 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 Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearway Energy and Quaker Chemical, you can compare the effects of market volatilities on Clearway Energy and Quaker Chemical 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 Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearway Energy and Quaker Chemical.
Diversification Opportunities for Clearway Energy and Quaker Chemical
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clearway and Quaker is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Clearway Energy and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical 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 Quaker Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Chemical has no effect on the direction of Clearway Energy i.e., Clearway Energy and Quaker Chemical go up and down completely randomly.
Pair Corralation between Clearway Energy and Quaker Chemical
Assuming the 90 days trading horizon Clearway Energy is expected to generate 1.06 times more return on investment than Quaker Chemical. However, Clearway Energy is 1.06 times more volatile than Quaker Chemical. It trades about 0.02 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.02 per unit of risk. If you would invest 2,390 in Clearway Energy on September 19, 2024 and sell it today you would earn a total of 143.00 from holding Clearway Energy or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearway Energy vs. Quaker Chemical
Performance |
| Timeline |
| Clearway Energy |
| Quaker Chemical |
Clearway Energy and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearway Energy and Quaker Chemical
The main advantage of trading using opposite Clearway Energy and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearway Energy position performs unexpectedly, Quaker Chemical 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 Quaker Chemical will offset losses from the drop in Quaker Chemical's long position.| Clearway Energy vs. TIANDE CHEMICAL | Clearway Energy vs. YATRA ONLINE DL 0001 | Clearway Energy vs. X FAB Silicon Foundries | Clearway Energy vs. China BlueChemical |
| Quaker Chemical vs. Avanos Medical | Quaker Chemical vs. Astral Foods Limited | Quaker Chemical vs. Diamyd Medical AB | Quaker Chemical vs. ASSOC BR FOODS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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