Correlation Between CLEAN ENERGY and Silver Mines
Can any of the company-specific risk be diversified away by investing in both CLEAN ENERGY and Silver Mines 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 Silver Mines 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 Silver Mines Limited, you can compare the effects of market volatilities on CLEAN ENERGY and Silver Mines 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 Silver Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLEAN ENERGY and Silver Mines.
Diversification Opportunities for CLEAN ENERGY and Silver Mines
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CLEAN and Silver is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding CLEAN ENERGY FUELS and Silver Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Mines Limited 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 Silver Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Mines Limited has no effect on the direction of CLEAN ENERGY i.e., CLEAN ENERGY and Silver Mines go up and down completely randomly.
Pair Corralation between CLEAN ENERGY and Silver Mines
Assuming the 90 days trading horizon CLEAN ENERGY FUELS is expected to under-perform the Silver Mines. But the stock apears to be less risky and, when comparing its historical volatility, CLEAN ENERGY FUELS is 2.38 times less risky than Silver Mines. The stock trades about -0.02 of its potential returns per unit of risk. The Silver Mines Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Silver Mines Limited on October 28, 2024 and sell it today you would lose (6.87) from holding Silver Mines Limited or give up 62.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CLEAN ENERGY FUELS vs. Silver Mines Limited
Performance |
| Timeline |
| CLEAN ENERGY FUELS |
| Silver Mines Limited |
CLEAN ENERGY and Silver Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CLEAN ENERGY and Silver Mines
The main advantage of trading using opposite CLEAN ENERGY and Silver Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLEAN ENERGY position performs unexpectedly, Silver Mines 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 Silver Mines will offset losses from the drop in Silver Mines' long position.| CLEAN ENERGY vs. PLANT VEDA FOODS | CLEAN ENERGY vs. Japan Post Insurance | CLEAN ENERGY vs. PURE FOODS TASMANIA | CLEAN ENERGY vs. SBI Insurance Group |
| Silver Mines vs. TITANIUM TRANSPORTGROUP | Silver Mines vs. KENEDIX OFFICE INV | Silver Mines vs. Fukuyama Transporting Co | Silver Mines vs. SOEDER SPORTFISKE AB |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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