Correlation Between CLEAN ENERGY and Aedas Homes
Can any of the company-specific risk be diversified away by investing in both CLEAN ENERGY and Aedas Homes 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 CLEAN ENERGY and Aedas Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CLEAN ENERGY FUELS and Aedas Homes SA, you can compare the effects of market volatilities on CLEAN ENERGY and Aedas Homes 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 CLEAN ENERGY with a short position of Aedas Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLEAN ENERGY and Aedas Homes.
Diversification Opportunities for CLEAN ENERGY and Aedas Homes
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CLEAN and Aedas is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CLEAN ENERGY FUELS and Aedas Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedas Homes SA and CLEAN ENERGY 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 CLEAN ENERGY FUELS are associated (or correlated) with Aedas Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedas Homes SA has no effect on the direction of CLEAN ENERGY i.e., CLEAN ENERGY and Aedas Homes go up and down completely randomly.
Pair Corralation between CLEAN ENERGY and Aedas Homes
Assuming the 90 days trading horizon CLEAN ENERGY FUELS is expected to under-perform the Aedas Homes. In addition to that, CLEAN ENERGY is 1.92 times more volatile than Aedas Homes SA. It trades about -0.01 of its total potential returns per unit of risk. Aedas Homes SA is currently generating about 0.12 per unit of volatility. If you would invest 1,037 in Aedas Homes SA on November 1, 2024 and sell it today you would earn a total of 1,743 from holding Aedas Homes SA or generate 168.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CLEAN ENERGY FUELS vs. Aedas Homes SA
Performance |
| Timeline |
| CLEAN ENERGY FUELS |
| Aedas Homes SA |
CLEAN ENERGY and Aedas Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CLEAN ENERGY and Aedas Homes
The main advantage of trading using opposite CLEAN ENERGY and Aedas Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLEAN ENERGY position performs unexpectedly, Aedas Homes 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 Aedas Homes will offset losses from the drop in Aedas Homes' long position.| CLEAN ENERGY vs. ITALIAN WINE BRANDS | CLEAN ENERGY vs. LAir Liquide SA | CLEAN ENERGY vs. Treasury Wine Estates | CLEAN ENERGY vs. Norwegian Air Shuttle |
| Aedas Homes vs. Singapore Telecommunications Limited | Aedas Homes vs. CITIC Telecom International | Aedas Homes vs. CLEAN ENERGY FUELS | Aedas Homes vs. Universal Entertainment |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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