Correlation Between Clean Energy and GrafTech International
Can any of the company-specific risk be diversified away by investing in both Clean Energy and GrafTech International 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 GrafTech International 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 GrafTech International, you can compare the effects of market volatilities on Clean Energy and GrafTech International 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 GrafTech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and GrafTech International.
Diversification Opportunities for Clean Energy and GrafTech International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Clean and GrafTech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels and GrafTech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrafTech International 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 GrafTech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrafTech International has no effect on the direction of Clean Energy i.e., Clean Energy and GrafTech International go up and down completely randomly.
Pair Corralation between Clean Energy and GrafTech International
Assuming the 90 days horizon Clean Energy Fuels is expected to under-perform the GrafTech International. But the stock apears to be less risky and, when comparing its historical volatility, Clean Energy Fuels is 1.38 times less risky than GrafTech International. The stock trades about -0.02 of its potential returns per unit of risk. The GrafTech International is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 458.00 in GrafTech International on September 24, 2024 and sell it today you would lose (303.00) from holding GrafTech International or give up 66.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Energy Fuels vs. GrafTech International
Performance |
| Timeline |
| Clean Energy Fuels |
| GrafTech International |
Clean Energy and GrafTech International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Energy and GrafTech International
The main advantage of trading using opposite Clean Energy and GrafTech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy position performs unexpectedly, GrafTech International 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 GrafTech International will offset losses from the drop in GrafTech International's long position.| Clean Energy vs. Reliance Industries Limited | Clean Energy vs. Marathon Petroleum Corp | Clean Energy vs. Valero Energy | Clean Energy vs. NESTE OYJ UNSPADR |
| GrafTech International vs. Evolution Mining Limited | GrafTech International vs. American Airlines Group | GrafTech International vs. Clean Energy Fuels | GrafTech International vs. ALERION CLEANPOWER |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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