Correlation Between CLEAN ENERGY and CryoLife

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

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

Diversification Opportunities for CLEAN ENERGY and CryoLife

0.94

Correlation Coefficient

CLEAN ENERGY  CryoLife

Almost no diversification

The 3 months correlation between CLEAN and CryoLife is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding CLEAN ENERGY FUELS and CryoLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoLife and CLEAN 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 CLEAN ENERGY FUELS are associated (or correlated) with CryoLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoLife has no effect on the direction of CLEAN ENERGY i.e., CLEAN ENERGY and CryoLife go up and down completely randomly.

Pair Corralation between CLEAN ENERGY and CryoLife

Assuming the 90 days trading horizon CLEAN ENERGY FUELS is expected to under-perform the CryoLife. In addition to that, CLEAN ENERGY is 2.38 times more volatile than CryoLife. It trades about -0.13 of its total potential returns per unit of risk. CryoLife is currently generating about -0.16 per unit of volatility. If you would invest  2,715  in CryoLife on December 21, 2024 and sell it today you would lose (490.00) from holding CryoLife or give up 18.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

CLEAN ENERGY FUELS  vs.  CryoLife

CLEAN ENERGY FUELS

Risk-Adjusted Performance

Very Weak

Over the last 90 days CLEAN ENERGY FUELS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CryoLife

Risk-Adjusted Performance

Very Weak

Over the last 90 days CryoLife has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CLEAN ENERGY and CryoLife

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

The idea behind CLEAN ENERGY FUELS and CryoLife 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.