Correlation Between Clearway Energy and Heliogen

Can any of the company-specific risk be diversified away by investing in both Clearway Energy and Heliogen 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 Clearway Energy and Heliogen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clearway Energy and Heliogen, you can compare the effects of market volatilities on Clearway Energy and Heliogen 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 Clearway Energy with a short position of Heliogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearway Energy and Heliogen.

Diversification Opportunities for Clearway Energy and Heliogen

0.66

Correlation Coefficient

Clearway Energy  Heliogen

Poor diversification

The 3 months correlation between Clearway and Heliogen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Clearway Energy and Heliogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heliogen and Clearway 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 Clearway Energy are associated (or correlated) with Heliogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heliogen has no effect on the direction of Clearway Energy i.e., Clearway Energy and Heliogen go up and down completely randomly.

Pair Corralation between Clearway Energy and Heliogen

If you would invest  2,514  in Clearway Energy on September 8, 2024 and sell it today you would earn a total of  142.00  from holding Clearway Energy or generate 5.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.54%
Values	Daily Returns

Clearway Energy  vs.  Heliogen

Clearway Energy

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clearway Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Clearway Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Heliogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heliogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Heliogen is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Clearway Energy and Heliogen

The main advantage of trading using opposite Clearway Energy and Heliogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearway Energy position performs unexpectedly, Heliogen 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 Heliogen will offset losses from the drop in Heliogen's long position.

The idea behind Clearway Energy and Heliogen pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.