Correlation Between SOCKET MOBILE and Clean Energy

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Can any of the company-specific risk be diversified away by investing in both SOCKET MOBILE 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 SOCKET MOBILE and Clean Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOCKET MOBILE NEW and Clean Energy Fuels, you can compare the effects of market volatilities on SOCKET MOBILE 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 SOCKET MOBILE with a short position of Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOCKET MOBILE and Clean Energy.

Diversification Opportunities for SOCKET MOBILE and Clean Energy

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between SOCKET and Clean is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SOCKET MOBILE NEW 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 SOCKET MOBILE 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 SOCKET MOBILE NEW 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 SOCKET MOBILE i.e., SOCKET MOBILE and Clean Energy go up and down completely randomly.

Pair Corralation between SOCKET MOBILE and Clean Energy

Assuming the 90 days trading horizon SOCKET MOBILE NEW is expected to generate 0.87 times more return on investment than Clean Energy. However, SOCKET MOBILE NEW is 1.15 times less risky than Clean Energy. It trades about -0.01 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  216.00  in SOCKET MOBILE NEW on October 27, 2024 and sell it today you would lose (67.00) from holding SOCKET MOBILE NEW or give up 31.02% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SOCKET MOBILE NEW  vs.  Clean Energy Fuels

 Performance 
       Timeline  
SOCKET MOBILE NEW 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in SOCKET MOBILE NEW are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental drivers, SOCKET MOBILE reported solid returns over the last few months and may actually be approaching a breakup point.
Clean Energy Fuels 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Clean Energy Fuels are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Clean Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SOCKET MOBILE and Clean Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SOCKET MOBILE and Clean Energy

The main advantage of trading using opposite SOCKET MOBILE and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOCKET MOBILE 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.
The idea behind SOCKET MOBILE NEW and Clean Energy Fuels pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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