Correlation Between Clean Energy and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Clean Energy and CN MODERN 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 CN MODERN 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 CN MODERN DAIRY, you can compare the effects of market volatilities on Clean Energy and CN MODERN 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 CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and CN MODERN.
Diversification Opportunities for Clean Energy and CN MODERN
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Clean and 07M is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY 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 CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of Clean Energy i.e., Clean Energy and CN MODERN go up and down completely randomly.
Pair Corralation between Clean Energy and CN MODERN
Assuming the 90 days horizon Clean Energy Fuels is expected to generate 0.79 times more return on investment than CN MODERN. However, Clean Energy Fuels is 1.27 times less risky than CN MODERN. It trades about 0.12 of its potential returns per unit of risk. CN MODERN DAIRY is currently generating about -0.02 per unit of risk. If you would invest 261.00 in Clean Energy Fuels on October 17, 2024 and sell it today you would earn a total of 18.00 from holding Clean Energy Fuels or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Clean Energy Fuels vs. CN MODERN DAIRY
Performance |
| Timeline |
| Clean Energy Fuels |
| CN MODERN DAIRY |
Clean Energy and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Energy and CN MODERN
The main advantage of trading using opposite Clean Energy and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| Clean Energy vs. MARKET VECTR RETAIL | Clean Energy vs. Tradegate AG Wertpapierhandelsbank | Clean Energy vs. EAT WELL INVESTMENT | Clean Energy vs. SEI INVESTMENTS |
| CN MODERN vs. Clean Energy Fuels | CN MODERN vs. Safety Insurance Group | CN MODERN vs. Japan Post Insurance | CN MODERN vs. INSURANCE AUST GRP |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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