Correlation Between Retail Food and Renewable Energy

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

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

Diversification Opportunities for Retail Food and Renewable Energy

-1.0

Correlation Coefficient

Retail Food  Renewable Energy

Pay attention - limited upside

The 3 months correlation between Retail and Renewable is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding Retail Food Group and Renewable Energy Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renewable Energy Trade and Retail Food 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 Retail Food Group are associated (or correlated) with Renewable Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renewable Energy Trade has no effect on the direction of Retail Food i.e., Retail Food and Renewable Energy go up and down completely randomly.

Pair Corralation between Retail Food and Renewable Energy

If you would invest  0.01  in Renewable Energy Trade on September 6, 2025 and sell it today you would earn a total of  0.00  from holding Renewable Energy Trade or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Strong
Accuracy	96.88%
Values	Daily Returns

Retail Food Group  vs.  Renewable Energy Trade

Retail Food Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Retail Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Retail Food is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Renewable Energy Trade

Risk-Adjusted Performance

Weakest

Over the last 90 days Renewable Energy Trade has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Renewable Energy is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Retail Food and Renewable Energy

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

The idea behind Retail Food Group and Renewable Energy Trade 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.