Correlation Between SOUTHERN and Capital Clean
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By analyzing existing cross correlation between SOUTHERN CALIF EDISON and Capital Clean Energy, you can compare the effects of market volatilities on SOUTHERN and Capital Clean 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 SOUTHERN with a short position of Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHERN and Capital Clean.
Diversification Opportunities for SOUTHERN and Capital Clean
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SOUTHERN and Capital is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN CALIF EDISON and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy and SOUTHERN 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 SOUTHERN CALIF EDISON are associated (or correlated) with Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of SOUTHERN i.e., SOUTHERN and Capital Clean go up and down completely randomly.
Pair Corralation between SOUTHERN and Capital Clean
Assuming the 90 days trading horizon SOUTHERN CALIF EDISON is expected to generate 0.55 times more return on investment than Capital Clean. However, SOUTHERN CALIF EDISON is 1.81 times less risky than Capital Clean. It trades about 0.23 of its potential returns per unit of risk. Capital Clean Energy is currently generating about 0.0 per unit of risk. If you would invest 7,539 in SOUTHERN CALIF EDISON on September 5, 2024 and sell it today you would earn a total of 240.00 from holding SOUTHERN CALIF EDISON or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
SOUTHERN CALIF EDISON vs. Capital Clean Energy
Performance |
| Timeline |
| SOUTHERN CALIF EDISON |
| Capital Clean Energy |
SOUTHERN and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOUTHERN and Capital Clean
The main advantage of trading using opposite SOUTHERN and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHERN position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean's long position.The idea behind SOUTHERN CALIF EDISON and Capital Clean Energy 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.| Capital Clean vs. Natural Alternatives International | Capital Clean vs. Where Food Comes | Capital Clean vs. SunOpta | Capital Clean vs. Asbury Automotive Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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