Correlation Between SPECTRAL MEDICAL and CLEAN ENERGY
Can any of the company-specific risk be diversified away by investing in both SPECTRAL MEDICAL 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 SPECTRAL MEDICAL and CLEAN ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPECTRAL MEDICAL and CLEAN ENERGY FUELS, you can compare the effects of market volatilities on SPECTRAL MEDICAL 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 SPECTRAL MEDICAL with a short position of CLEAN ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPECTRAL MEDICAL and CLEAN ENERGY.
Diversification Opportunities for SPECTRAL MEDICAL and CLEAN ENERGY
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPECTRAL and CLEAN is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SPECTRAL MEDICAL 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 SPECTRAL MEDICAL 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 SPECTRAL MEDICAL 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 SPECTRAL MEDICAL i.e., SPECTRAL MEDICAL and CLEAN ENERGY go up and down completely randomly.
Pair Corralation between SPECTRAL MEDICAL and CLEAN ENERGY
Assuming the 90 days horizon SPECTRAL MEDICAL is expected to generate 1.52 times more return on investment than CLEAN ENERGY. However, SPECTRAL MEDICAL is 1.52 times more volatile than CLEAN ENERGY FUELS. It trades about 0.04 of its potential returns per unit of risk. CLEAN ENERGY FUELS is currently generating about -0.01 per unit of risk. If you would invest 26.00 in SPECTRAL MEDICAL on October 12, 2024 and sell it today you would earn a total of 11.00 from holding SPECTRAL MEDICAL or generate 42.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPECTRAL MEDICAL vs. CLEAN ENERGY FUELS
Performance |
| Timeline |
| SPECTRAL MEDICAL |
| CLEAN ENERGY FUELS |
SPECTRAL MEDICAL and CLEAN ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPECTRAL MEDICAL and CLEAN ENERGY
The main advantage of trading using opposite SPECTRAL MEDICAL and CLEAN ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPECTRAL MEDICAL 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.| SPECTRAL MEDICAL vs. DeVry Education Group | SPECTRAL MEDICAL vs. RETAIL FOOD GROUP | SPECTRAL MEDICAL vs. Ross Stores | SPECTRAL MEDICAL vs. VIRGIN WINES UK |
| CLEAN ENERGY vs. SENECA FOODS A | CLEAN ENERGY vs. MeVis Medical Solutions | CLEAN ENERGY vs. SPECTRAL MEDICAL | CLEAN ENERGY vs. Advanced Medical Solutions |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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