Correlation Between UNITED UTILITIES and Clean Energy
Can any of the company-specific risk be diversified away by investing in both UNITED UTILITIES 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 UNITED UTILITIES and Clean Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED UTILITIES GR and Clean Energy Fuels, you can compare the effects of market volatilities on UNITED UTILITIES 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 UNITED UTILITIES with a short position of Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED UTILITIES and Clean Energy.
Diversification Opportunities for UNITED UTILITIES and Clean Energy
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between UNITED and Clean is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding UNITED UTILITIES GR 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 UNITED UTILITIES 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 UNITED UTILITIES GR 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 UNITED UTILITIES i.e., UNITED UTILITIES and Clean Energy go up and down completely randomly.
Pair Corralation between UNITED UTILITIES and Clean Energy
Assuming the 90 days trading horizon UNITED UTILITIES GR is expected to generate 0.38 times more return on investment than Clean Energy. However, UNITED UTILITIES GR is 2.66 times less risky than Clean Energy. It trades about 0.04 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 1,062 in UNITED UTILITIES GR on August 31, 2024 and sell it today you would earn a total of 278.00 from holding UNITED UTILITIES GR or generate 26.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
UNITED UTILITIES GR vs. Clean Energy Fuels
Performance |
| Timeline |
| UNITED UTILITIES |
| Clean Energy Fuels |
UNITED UTILITIES and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED UTILITIES and Clean Energy
The main advantage of trading using opposite UNITED UTILITIES and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED UTILITIES 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.| UNITED UTILITIES vs. SIVERS SEMICONDUCTORS AB | UNITED UTILITIES vs. Darden Restaurants | UNITED UTILITIES vs. Reliance Steel Aluminum | UNITED UTILITIES vs. Q2M Managementberatung AG |
| Clean Energy vs. STORE ELECTRONIC | Clean Energy vs. Astral Foods Limited | Clean Energy vs. AUSNUTRIA DAIRY | Clean Energy vs. JJ SNACK FOODS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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