Correlation Between Clean Energy and Postal Savings
Can any of the company-specific risk be diversified away by investing in both Clean Energy and Postal Savings 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 Postal Savings 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 Postal Savings Bank, you can compare the effects of market volatilities on Clean Energy and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and Postal Savings.
Diversification Opportunities for Clean Energy and Postal Savings
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Clean and Postal is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Clean Energy i.e., Clean Energy and Postal Savings go up and down completely randomly.
Pair Corralation between Clean Energy and Postal Savings
Assuming the 90 days horizon Clean Energy Fuels is expected to generate 2.86 times more return on investment than Postal Savings. However, Clean Energy is 2.86 times more volatile than Postal Savings Bank. It trades about 0.12 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.06 per unit of risk. If you would invest 262.00 in Clean Energy Fuels on September 3, 2024 and sell it today you would earn a total of 29.00 from holding Clean Energy Fuels or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Energy Fuels vs. Postal Savings Bank
Performance |
| Timeline |
| Clean Energy Fuels |
| Postal Savings Bank |
Clean Energy and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Energy and Postal Savings
The main advantage of trading using opposite Clean Energy and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| Clean Energy vs. Marathon Petroleum Corp | Clean Energy vs. Neste Oyj | Clean Energy vs. ENEOS Holdings | Clean Energy vs. PTT OILRETBUS FOR BA10 |
| Postal Savings vs. Boyd Gaming | Postal Savings vs. Games Workshop Group | Postal Savings vs. Clean Energy Fuels | Postal Savings vs. International Game Technology |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |