Correlation Between Clean Energy and MARKET VECTR
Can any of the company-specific risk be diversified away by investing in both Clean Energy and MARKET VECTR 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 MARKET VECTR 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 MARKET VECTR RETAIL, you can compare the effects of market volatilities on Clean Energy and MARKET VECTR 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 MARKET VECTR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and MARKET VECTR.
Diversification Opportunities for Clean Energy and MARKET VECTR
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clean and MARKET is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels and MARKET VECTR RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARKET VECTR RETAIL 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 MARKET VECTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARKET VECTR RETAIL has no effect on the direction of Clean Energy i.e., Clean Energy and MARKET VECTR go up and down completely randomly.
Pair Corralation between Clean Energy and MARKET VECTR
Assuming the 90 days horizon Clean Energy Fuels is expected to generate 5.85 times more return on investment than MARKET VECTR. However, Clean Energy is 5.85 times more volatile than MARKET VECTR RETAIL. It trades about 0.08 of its potential returns per unit of risk. MARKET VECTR RETAIL is currently generating about -0.36 per unit of risk. If you would invest 270.00 in Clean Energy Fuels on October 8, 2024 and sell it today you would earn a total of 9.00 from holding Clean Energy Fuels or generate 3.33% 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. MARKET VECTR RETAIL
Performance |
| Timeline |
| Clean Energy Fuels |
| MARKET VECTR RETAIL |
Clean Energy and MARKET VECTR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Energy and MARKET VECTR
The main advantage of trading using opposite Clean Energy and MARKET VECTR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy position performs unexpectedly, MARKET VECTR 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 MARKET VECTR will offset losses from the drop in MARKET VECTR's long position.| Clean Energy vs. NESTE OYJ UNSPADR | Clean Energy vs. Superior Plus Corp | Clean Energy vs. NMI Holdings | Clean Energy vs. SIVERS SEMICONDUCTORS AB |
| MARKET VECTR vs. Westinghouse Air Brake | MARKET VECTR vs. Hochschild Mining plc | MARKET VECTR vs. SOGECLAIR SA INH | MARKET VECTR vs. CHINA SOUTHN AIR H |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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