Correlation Between D3 Energy and Clearway Energy

Can any of the company-specific risk be diversified away by investing in both D3 Energy 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 D3 Energy and Clearway Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between D3 Energy and Clearway Energy Class, you can compare the effects of market volatilities on D3 Energy 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 D3 Energy with a short position of Clearway Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of D3 Energy and Clearway Energy.

Diversification Opportunities for D3 Energy and Clearway Energy

-0.57

Correlation Coefficient

D3 Energy  Clearway Energy

Excellent diversification

The 3 months correlation between D3E and Clearway is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding D3 Energy 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 D3 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 D3 Energy 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 D3 Energy i.e., D3 Energy and Clearway Energy go up and down completely randomly.

Pair Corralation between D3 Energy and Clearway Energy

Assuming the 90 days trading horizon D3 Energy is expected to under-perform the Clearway Energy. In addition to that, D3 Energy is 5.38 times more volatile than Clearway Energy Class. It trades about -0.04 of its total potential returns per unit of risk. Clearway Energy Class is currently generating about 0.09 per unit of volatility. If you would invest  3,155  in Clearway Energy Class on October 8, 2025 and sell it today you would earn a total of  241.00  from holding Clearway Energy Class or generate 7.64% return on investment over 90 days.

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

D3 Energy  vs.  Clearway Energy Class

D3 Energy

Risk-Adjusted Performance

Weakest

Over the last 90 days D3 Energy 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 technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2026. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Clearway Energy Class

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Clearway Energy Class are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Clearway Energy may actually be approaching a critical reversion point that can send shares even higher in February 2026.

Pair Trading with D3 Energy and Clearway Energy

The main advantage of trading using opposite D3 Energy and Clearway Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if D3 Energy 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 D3 Energy 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.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.