Correlation Between Shunfeng International and Constellation Energy
Can any of the company-specific risk be diversified away by investing in both Shunfeng International and Constellation 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 Shunfeng International and Constellation Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shunfeng International Clean and Constellation Energy Corp, you can compare the effects of market volatilities on Shunfeng International and Constellation 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 Shunfeng International with a short position of Constellation Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shunfeng International and Constellation Energy.
Diversification Opportunities for Shunfeng International and Constellation Energy
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shunfeng and Constellation is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Shunfeng International Clean and Constellation Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Energy Corp and Shunfeng International 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 Shunfeng International Clean are associated (or correlated) with Constellation Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Energy Corp has no effect on the direction of Shunfeng International i.e., Shunfeng International and Constellation Energy go up and down completely randomly.
Pair Corralation between Shunfeng International and Constellation Energy
Assuming the 90 days horizon Shunfeng International Clean is expected to generate 4.09 times more return on investment than Constellation Energy. However, Shunfeng International is 4.09 times more volatile than Constellation Energy Corp. It trades about 0.18 of its potential returns per unit of risk. Constellation Energy Corp is currently generating about 0.16 per unit of risk. If you would invest 0.13 in Shunfeng International Clean on August 31, 2024 and sell it today you would earn a total of 0.35 from holding Shunfeng International Clean or generate 269.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shunfeng International Clean vs. Constellation Energy Corp
Performance |
| Timeline |
| Shunfeng International |
| Constellation Energy Corp |
Shunfeng International and Constellation Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shunfeng International and Constellation Energy
The main advantage of trading using opposite Shunfeng International and Constellation Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shunfeng International position performs unexpectedly, Constellation 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 Constellation Energy will offset losses from the drop in Constellation Energy's long position.| Shunfeng International vs. Constellation Energy Corp | Shunfeng International vs. Orsted AS ADR | Shunfeng International vs. Orsted AS | Shunfeng International vs. HUMANA INC |
| Constellation Energy vs. Atlantica Sustainable Infrastructure | Constellation Energy vs. Clearway Energy | Constellation Energy vs. Brookfield Renewable Corp | Constellation Energy vs. Nextera Energy 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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