Correlation Between Brenmiller Energy and Clearway Energy

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

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

Diversification Opportunities for Brenmiller Energy and Clearway Energy

-0.64

Correlation Coefficient

Brenmiller Energy  Clearway Energy

Excellent diversification

The 3 months correlation between Brenmiller and Clearway is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Brenmiller Energy Ltd and Clearway Energy Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearway Energy Class and Brenmiller 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 Brenmiller Energy Ltd are associated (or correlated) with Clearway Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearway Energy Class has no effect on the direction of Brenmiller Energy i.e., Brenmiller Energy and Clearway Energy go up and down completely randomly.

Pair Corralation between Brenmiller Energy and Clearway Energy

Given the investment horizon of 90 days Brenmiller Energy Ltd is expected to generate 7.26 times more return on investment than Clearway Energy. However, Brenmiller Energy is 7.26 times more volatile than Clearway Energy Class. It trades about 0.15 of its potential returns per unit of risk. Clearway Energy Class is currently generating about -0.04 per unit of risk. If you would invest  82.00  in Brenmiller Energy Ltd on November 29, 2024 and sell it today you would earn a total of  72.00  from holding Brenmiller Energy Ltd or generate 87.8% return on investment over 90 days.

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

Brenmiller Energy Ltd  vs.  Clearway Energy Class

Brenmiller Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy Ltd are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Brenmiller Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Clearway Energy Class

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Brenmiller Energy and Clearway Energy

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

The idea behind Brenmiller Energy Ltd and Clearway Energy Class 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.