Correlation Between Reinsurance Group and CLEAN ENERGY
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group and CLEAN 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 Reinsurance Group and CLEAN ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinsurance Group of and CLEAN ENERGY FUELS, you can compare the effects of market volatilities on Reinsurance Group and CLEAN 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 Reinsurance Group with a short position of CLEAN ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and CLEAN ENERGY.
Diversification Opportunities for Reinsurance Group and CLEAN ENERGY
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Reinsurance and CLEAN is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and CLEAN ENERGY FUELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEAN ENERGY FUELS and Reinsurance Group 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 Reinsurance Group of are associated (or correlated) with CLEAN ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEAN ENERGY FUELS has no effect on the direction of Reinsurance Group i.e., Reinsurance Group and CLEAN ENERGY go up and down completely randomly.
Pair Corralation between Reinsurance Group and CLEAN ENERGY
Assuming the 90 days trading horizon Reinsurance Group is expected to generate 3.86 times less return on investment than CLEAN ENERGY. But when comparing it to its historical volatility, Reinsurance Group of is 1.64 times less risky than CLEAN ENERGY. It trades about 0.09 of its potential returns per unit of risk. CLEAN ENERGY FUELS is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 259.00 in CLEAN ENERGY FUELS on October 11, 2024 and sell it today you would earn a total of 32.00 from holding CLEAN ENERGY FUELS or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. CLEAN ENERGY FUELS
Performance |
| Timeline |
| Reinsurance Group |
| CLEAN ENERGY FUELS |
Reinsurance Group and CLEAN ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and CLEAN ENERGY
The main advantage of trading using opposite Reinsurance Group and CLEAN ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group position performs unexpectedly, CLEAN 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 CLEAN ENERGY will offset losses from the drop in CLEAN ENERGY's long position.| Reinsurance Group vs. CAIRN HOMES EO | Reinsurance Group vs. JAPAN AIRLINES | Reinsurance Group vs. Neinor Homes SA | Reinsurance Group vs. Focus Home Interactive |
| CLEAN ENERGY vs. Reinsurance Group of | CLEAN ENERGY vs. CN MODERN DAIRY | CLEAN ENERGY vs. Direct Line Insurance | CLEAN ENERGY vs. Tyson 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |