Correlation Between Smart Powerr and Clearway Energy

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

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

Diversification Opportunities for Smart Powerr and Clearway Energy

-0.87

Correlation Coefficient

Smart Powerr  Clearway Energy

Pay attention - limited upside

The 3 months correlation between Smart and Clearway is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Smart Powerr Corp 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 Smart Powerr 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 Smart Powerr Corp 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 Smart Powerr i.e., Smart Powerr and Clearway Energy go up and down completely randomly.

Pair Corralation between Smart Powerr and Clearway Energy

Given the investment horizon of 90 days Smart Powerr Corp is expected to under-perform the Clearway Energy. In addition to that, Smart Powerr is 6.22 times more volatile than Clearway Energy Class. It trades about -0.23 of its total potential returns per unit of risk. Clearway Energy Class is currently generating about 0.16 per unit of volatility. If you would invest  2,823  in Clearway Energy Class on May 4, 2025 and sell it today you would earn a total of  417.00  from holding Clearway Energy Class or generate 14.77% return on investment over 90 days.

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

Smart Powerr Corp  vs.  Clearway Energy Class

Smart Powerr Corp

Risk-Adjusted Performance

Very Weak

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

Clearway Energy Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Clearway Energy Class are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Clearway Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Smart Powerr and Clearway Energy

The main advantage of trading using opposite Smart Powerr and Clearway Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart Powerr 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 Smart Powerr Corp 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.