Correlation Between ReNew Energy and Kenon Holdings
Can any of the company-specific risk be diversified away by investing in both ReNew Energy and Kenon Holdings 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 Kenon Holdings 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 Kenon Holdings, you can compare the effects of market volatilities on ReNew Energy and Kenon Holdings 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 Kenon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReNew Energy and Kenon Holdings.
Diversification Opportunities for ReNew Energy and Kenon Holdings
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ReNew and Kenon is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ReNew Energy Global and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon Holdings 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 Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of ReNew Energy i.e., ReNew Energy and Kenon Holdings go up and down completely randomly.
Pair Corralation between ReNew Energy and Kenon Holdings
Assuming the 90 days horizon ReNew Energy Global is expected to generate 8.57 times more return on investment than Kenon Holdings. However, ReNew Energy is 8.57 times more volatile than Kenon Holdings. It trades about 0.11 of its potential returns per unit of risk. Kenon Holdings is currently generating about 0.19 per unit of risk. If you would invest 27.00 in ReNew Energy Global on August 28, 2024 and sell it today you would earn a total of 4.00 from holding ReNew Energy Global or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ReNew Energy Global vs. Kenon Holdings
Performance |
| Timeline |
| ReNew Energy Global |
| Kenon Holdings |
ReNew Energy and Kenon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ReNew Energy and Kenon Holdings
The main advantage of trading using opposite ReNew Energy and Kenon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReNew Energy position performs unexpectedly, Kenon Holdings 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 Kenon Holdings will offset losses from the drop in Kenon Holdings' long position.| ReNew Energy vs. Renew Energy Global | ReNew Energy vs. Xos Equity Warrants | ReNew Energy vs. Microvast Holdings | ReNew Energy vs. AEye Inc |
| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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