Correlation Between Clearway and Dow Jones
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By analyzing existing cross correlation between Clearway Energy Operating and Dow Jones Industrial, you can compare the effects of market volatilities on Clearway and Dow Jones 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 Clearway with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearway and Dow Jones.
Diversification Opportunities for Clearway and Dow Jones
Excellent diversification
The 3 months correlation between Clearway and Dow is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Clearway Energy Operating and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Clearway 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 Clearway Energy Operating are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Clearway i.e., Clearway and Dow Jones go up and down completely randomly.
Pair Corralation between Clearway and Dow Jones
Assuming the 90 days trading horizon Clearway Energy Operating is expected to under-perform the Dow Jones. But the bond apears to be less risky and, when comparing its historical volatility, Clearway Energy Operating is 1.01 times less risky than Dow Jones. The bond trades about -0.03 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,885,227 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 605,838 from holding Dow Jones Industrial or generate 15.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.52% |
| Values | Daily Returns |
Clearway Energy Operating vs. Dow Jones Industrial
Performance |
| Timeline |
Clearway and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Clearway Energy Operating
Pair trading matchups for Clearway
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Clearway and Dow Jones
The main advantage of trading using opposite Clearway and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearway position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Clearway vs. Western Digital | Clearway vs. KVH Industries | Clearway vs. Iridium Communications | Clearway vs. Jabil Circuit |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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