Correlation Between Renew Energy and Altus Power
Can any of the company-specific risk be diversified away by investing in both Renew Energy and Altus 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 Renew Energy and Altus Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renew Energy Global and Altus Power, you can compare the effects of market volatilities on Renew Energy and Altus 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 Renew Energy with a short position of Altus Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renew Energy and Altus Power.
Diversification Opportunities for Renew Energy and Altus Power
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Renew and Altus is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Renew Energy Global and Altus Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Power and Renew 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 Renew Energy Global are associated (or correlated) with Altus Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Power has no effect on the direction of Renew Energy i.e., Renew Energy and Altus Power go up and down completely randomly.
Pair Corralation between Renew Energy and Altus Power
Considering the 90-day investment horizon Renew Energy Global is expected to generate 0.5 times more return on investment than Altus Power. However, Renew Energy Global is 2.01 times less risky than Altus Power. It trades about 0.08 of its potential returns per unit of risk. Altus Power is currently generating about -0.01 per unit of risk. If you would invest 596.00 in Renew Energy Global on October 26, 2024 and sell it today you would earn a total of 74.00 from holding Renew Energy Global or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renew Energy Global vs. Altus Power
Performance |
| Timeline |
| Renew Energy Global |
| Altus Power |
Renew Energy and Altus Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renew Energy and Altus Power
The main advantage of trading using opposite Renew Energy and Altus Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renew Energy position performs unexpectedly, Altus 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 Altus Power will offset losses from the drop in Altus Power's long position.| Renew Energy vs. Energy Vault Holdings | Renew Energy vs. Fluence Energy | Renew Energy vs. Altus Power | Renew Energy vs. Clearway Energy Class |
| Altus Power vs. Ormat Technologies | Altus Power vs. Enlight Renewable Energy | Altus Power vs. Fluence Energy | Altus Power vs. Renew Energy Global |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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