Correlation Between Voestalpine and Cleen Energy

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

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

Diversification Opportunities for Voestalpine and Cleen Energy

-0.21

Correlation Coefficient

Voestalpine  Cleen Energy

Very good diversification

The 3 months correlation between Voestalpine and Cleen is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Voestalpine AG and Cleen Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleen Energy AG and Voestalpine 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 Voestalpine AG are associated (or correlated) with Cleen Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleen Energy AG has no effect on the direction of Voestalpine i.e., Voestalpine and Cleen Energy go up and down completely randomly.

Pair Corralation between Voestalpine and Cleen Energy

Assuming the 90 days trading horizon Voestalpine AG is expected to generate 0.21 times more return on investment than Cleen Energy. However, Voestalpine AG is 4.87 times less risky than Cleen Energy. It trades about -0.11 of its potential returns per unit of risk. Cleen Energy AG is currently generating about -0.04 per unit of risk. If you would invest  2,112  in Voestalpine AG on September 5, 2024 and sell it today you would lose (298.00) from holding Voestalpine AG or give up 14.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Voestalpine AG  vs.  Cleen Energy AG

Voestalpine AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voestalpine AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Cleen Energy AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cleen Energy AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Voestalpine and Cleen Energy

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

The idea behind Voestalpine AG and Cleen Energy AG 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.