Correlation Between Heliogen and Renew Energy

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

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

Diversification Opportunities for Heliogen and Renew Energy

0.21

Correlation Coefficient

Heliogen  Renew Energy

Modest diversification

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

Pair Corralation between Heliogen and Renew Energy

If you would invest  569.00  in Renew Energy Global on August 31, 2024 and sell it today you would earn a total of  40.00  from holding Renew Energy Global or generate 7.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Heliogen  vs.  Renew Energy Global

Heliogen

Risk-Adjusted Performance

0 of 100

Very Weak

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

Renew Energy Global

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Renew Energy Global are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Renew Energy may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Heliogen and Renew Energy

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

The idea behind Heliogen and Renew Energy Global 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.