Correlation Between TransAlta Corp and Clearway Energy
Can any of the company-specific risk be diversified away by investing in both TransAlta Corp and Clearway 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 TransAlta Corp and Clearway Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TransAlta Corp and Clearway Energy, you can compare the effects of market volatilities on TransAlta Corp and Clearway 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 TransAlta Corp with a short position of Clearway Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransAlta Corp and Clearway Energy.
Diversification Opportunities for TransAlta Corp and Clearway Energy
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TransAlta and Clearway is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding TransAlta Corp and Clearway Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearway Energy and TransAlta Corp 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 TransAlta Corp are associated (or correlated) with Clearway Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearway Energy has no effect on the direction of TransAlta Corp i.e., TransAlta Corp and Clearway Energy go up and down completely randomly.
Pair Corralation between TransAlta Corp and Clearway Energy
Considering the 90-day investment horizon TransAlta Corp is expected to generate 1.62 times less return on investment than Clearway Energy. In addition to that, TransAlta Corp is 1.01 times more volatile than Clearway Energy. It trades about 0.1 of its total potential returns per unit of risk. Clearway Energy is currently generating about 0.17 per unit of volatility. If you would invest 2,444 in Clearway Energy on August 28, 2024 and sell it today you would earn a total of 256.00 from holding Clearway Energy or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
TransAlta Corp vs. Clearway Energy
Performance |
| Timeline |
| TransAlta Corp |
| Clearway Energy |
TransAlta Corp and Clearway Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TransAlta Corp and Clearway Energy
The main advantage of trading using opposite TransAlta Corp and Clearway Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransAlta Corp position performs unexpectedly, Clearway 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 Clearway Energy will offset losses from the drop in Clearway Energy's long position.| TransAlta Corp vs. Pampa Energia SA | TransAlta Corp vs. Vistra Energy Corp | TransAlta Corp vs. NRG Energy | TransAlta Corp vs. Power Assets Holdings |
| Clearway Energy vs. Atlantica Sustainable Infrastructure | Clearway Energy vs. Brookfield Renewable Corp | Clearway Energy vs. Nextera Energy Partners | Clearway Energy vs. Brookfield Renewable 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |