Correlation Between Capital Clean and Windstream Holdings

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

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

Diversification Opportunities for Capital Clean and Windstream Holdings

0.0

Correlation Coefficient

Capital Clean  Windstream Holdings

Pay attention - limited upside

The 3 months correlation between Capital and Windstream is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and Windstream Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Windstream Holdings and Capital Clean 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 Capital Clean Energy are associated (or correlated) with Windstream Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Windstream Holdings has no effect on the direction of Capital Clean i.e., Capital Clean and Windstream Holdings go up and down completely randomly.

Pair Corralation between Capital Clean and Windstream Holdings

If you would invest  1,220  in Capital Clean Energy on September 26, 2024 and sell it today you would earn a total of  607.00  from holding Capital Clean Energy or generate 49.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Capital Clean Energy  vs.  Windstream Holdings

Capital Clean Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Capital Clean is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Windstream Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Capital Clean and Windstream Holdings

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

The idea behind Capital Clean Energy and Windstream Holdings 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.