Correlation Between ClearVue Technologies and SPI Energy

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

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

Diversification Opportunities for ClearVue Technologies and SPI Energy

0.03

Correlation Coefficient

ClearVue Technologies  SPI Energy

Significant diversification

The 3 months correlation between ClearVue and SPI is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding ClearVue Technologies Limited and SPI Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPI Energy and ClearVue Technologies 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 ClearVue Technologies Limited are associated (or correlated) with SPI Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPI Energy has no effect on the direction of ClearVue Technologies i.e., ClearVue Technologies and SPI Energy go up and down completely randomly.

Pair Corralation between ClearVue Technologies and SPI Energy

Assuming the 90 days horizon ClearVue Technologies Limited is expected to generate 16.69 times more return on investment than SPI Energy. However, ClearVue Technologies is 16.69 times more volatile than SPI Energy Co. It trades about 0.11 of its potential returns per unit of risk. SPI Energy Co is currently generating about 0.02 per unit of risk. If you would invest  29.00  in ClearVue Technologies Limited on September 16, 2024 and sell it today you would lose (13.00) from holding ClearVue Technologies Limited or give up 44.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

ClearVue Technologies Limited  vs.  SPI Energy Co

ClearVue Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ClearVue Technologies Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, ClearVue Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

SPI Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPI Energy Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, SPI Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ClearVue Technologies and SPI Energy

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

The idea behind ClearVue Technologies Limited and SPI Energy Co 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.