Correlation Between Clean Energy and New York
Can any of the company-specific risk be diversified away by investing in both Clean Energy and New York 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 New York 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 The New York, you can compare the effects of market volatilities on Clean Energy and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and New York.
Diversification Opportunities for Clean Energy and New York
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clean and New is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels and The New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York has no effect on the direction of Clean Energy i.e., Clean Energy and New York go up and down completely randomly.
Pair Corralation between Clean Energy and New York
Assuming the 90 days horizon Clean Energy Fuels is expected to under-perform the New York. In addition to that, Clean Energy is 2.4 times more volatile than The New York. It trades about -0.02 of its total potential returns per unit of risk. The New York is currently generating about 0.07 per unit of volatility. If you would invest 3,082 in The New York on September 26, 2024 and sell it today you would earn a total of 1,984 from holding The New York or generate 64.37% 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. The New York
Performance |
| Timeline |
| Clean Energy Fuels |
| New York |
Clean Energy and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Energy and New York
The main advantage of trading using opposite Clean Energy and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy position performs unexpectedly, New York 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 New York will offset losses from the drop in New York'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 |
| New York vs. X FAB Silicon Foundries | New York vs. Clean Energy Fuels | New York vs. Coffee Holding Co | New York vs. Siamgas And Petrochemicals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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