Correlation Between Pampa Energia and Clearway Energy
Can any of the company-specific risk be diversified away by investing in both Pampa Energia and Clearway 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 Pampa Energia and Clearway Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pampa Energia SA and Clearway Energy, you can compare the effects of market volatilities on Pampa Energia and Clearway 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 Pampa Energia with a short position of Clearway Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pampa Energia and Clearway Energy.
Diversification Opportunities for Pampa Energia and Clearway Energy
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pampa and Clearway is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Pampa Energia SA and Clearway Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearway Energy and Pampa Energia 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 Pampa Energia SA are associated (or correlated) with Clearway Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearway Energy has no effect on the direction of Pampa Energia i.e., Pampa Energia and Clearway Energy go up and down completely randomly.
Pair Corralation between Pampa Energia and Clearway Energy
Considering the 90-day investment horizon Pampa Energia SA is expected to generate 0.61 times more return on investment than Clearway Energy. However, Pampa Energia SA is 1.64 times less risky than Clearway Energy. It trades about 0.54 of its potential returns per unit of risk. Clearway Energy is currently generating about 0.17 per unit of risk. If you would invest 6,700 in Pampa Energia SA on August 28, 2024 and sell it today you would earn a total of 1,563 from holding Pampa Energia SA or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pampa Energia SA vs. Clearway Energy
Performance |
| Timeline |
| Pampa Energia SA |
| Clearway Energy |
Pampa Energia and Clearway Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pampa Energia and Clearway Energy
The main advantage of trading using opposite Pampa Energia and Clearway Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pampa Energia position performs unexpectedly, Clearway 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 Clearway Energy will offset losses from the drop in Clearway Energy's long position.| Pampa Energia vs. Grupo Financiero Galicia | Pampa Energia vs. Banco Macro SA | Pampa Energia vs. Empresa Distribuidora y | Pampa Energia vs. Transportadora de Gas |
| Clearway Energy vs. Atlantica Sustainable Infrastructure | Clearway Energy vs. Brookfield Renewable Corp | Clearway Energy vs. Nextera Energy Partners | Clearway Energy vs. Brookfield Renewable Partners |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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