Correlation Between Clean Energy and Sysco
Can any of the company-specific risk be diversified away by investing in both Clean Energy and Sysco 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 Sysco 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 Sysco, you can compare the effects of market volatilities on Clean Energy and Sysco 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 Sysco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and Sysco.
Diversification Opportunities for Clean Energy and Sysco
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Clean and Sysco is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels and Sysco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysco 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 Sysco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysco has no effect on the direction of Clean Energy i.e., Clean Energy and Sysco go up and down completely randomly.
Pair Corralation between Clean Energy and Sysco
Assuming the 90 days horizon Clean Energy Fuels is expected to generate 3.17 times more return on investment than Sysco. However, Clean Energy is 3.17 times more volatile than Sysco. It trades about 0.07 of its potential returns per unit of risk. Sysco is currently generating about 0.05 per unit of risk. If you would invest 256.00 in Clean Energy Fuels on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Clean Energy Fuels or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Energy Fuels vs. Sysco
Performance |
| Timeline |
| Clean Energy Fuels |
| Sysco |
Clean Energy and Sysco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Energy and Sysco
The main advantage of trading using opposite Clean Energy and Sysco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy position performs unexpectedly, Sysco 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 Sysco will offset losses from the drop in Sysco's 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 |
| Sysco vs. Cleanaway Waste Management | Sysco vs. Clean Energy Fuels | Sysco vs. Beazer Homes USA | Sysco vs. Neinor Homes SA |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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