Correlation Between Clearway Energy and Energy Vault
Can any of the company-specific risk be diversified away by investing in both Clearway Energy and Energy Vault 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 Energy Vault into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearway Energy and Energy Vault Holdings, you can compare the effects of market volatilities on Clearway Energy and Energy Vault 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 Energy Vault. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearway Energy and Energy Vault.
Diversification Opportunities for Clearway Energy and Energy Vault
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearway and Energy is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Clearway Energy and Energy Vault Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Vault Holdings 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 Energy Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Vault Holdings has no effect on the direction of Clearway Energy i.e., Clearway Energy and Energy Vault go up and down completely randomly.
Pair Corralation between Clearway Energy and Energy Vault
Assuming the 90 days trading horizon Clearway Energy is expected to generate 0.22 times more return on investment than Energy Vault. However, Clearway Energy is 4.46 times less risky than Energy Vault. It trades about 0.05 of its potential returns per unit of risk. Energy Vault Holdings is currently generating about -0.01 per unit of risk. If you would invest 2,610 in Clearway Energy on September 5, 2024 and sell it today you would earn a total of 51.00 from holding Clearway Energy or generate 1.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Clearway Energy vs. Energy Vault Holdings
Performance |
Timeline |
Clearway Energy |
Energy Vault Holdings |
Clearway Energy and Energy Vault Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Clearway Energy and Energy Vault
The main advantage of trading using opposite Clearway Energy and Energy Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearway Energy position performs unexpectedly, Energy Vault 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 Energy Vault will offset losses from the drop in Energy Vault's long position.Clearway Energy vs. Atlantica Sustainable Infrastructure | Clearway Energy vs. Verde Clean Fuels | Clearway Energy vs. ReNew Energy Global | Clearway Energy vs. Ellomay Capital |
Energy Vault vs. Renew Energy Global | Energy Vault vs. Fluence Energy | Energy Vault vs. Enlight Renewable Energy | Energy Vault vs. Advent Technologies Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |