Correlation Between Suntory Beverage and CenterPoint Energy
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage and CenterPoint 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 Suntory Beverage and CenterPoint Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and CenterPoint Energy, you can compare the effects of market volatilities on Suntory Beverage and CenterPoint 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 Suntory Beverage with a short position of CenterPoint Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and CenterPoint Energy.
Diversification Opportunities for Suntory Beverage and CenterPoint Energy
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Suntory and CenterPoint is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and CenterPoint Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CenterPoint Energy and Suntory Beverage 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 Suntory Beverage Food are associated (or correlated) with CenterPoint Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CenterPoint Energy has no effect on the direction of Suntory Beverage i.e., Suntory Beverage and CenterPoint Energy go up and down completely randomly.
Pair Corralation between Suntory Beverage and CenterPoint Energy
Assuming the 90 days horizon Suntory Beverage is expected to generate 1.57 times less return on investment than CenterPoint Energy. In addition to that, Suntory Beverage is 1.28 times more volatile than CenterPoint Energy. It trades about 0.1 of its total potential returns per unit of risk. CenterPoint Energy is currently generating about 0.2 per unit of volatility. If you would invest 2,780 in CenterPoint Energy on September 12, 2024 and sell it today you would earn a total of 180.00 from holding CenterPoint Energy or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. CenterPoint Energy
Performance |
| Timeline |
| Suntory Beverage Food |
| CenterPoint Energy |
Suntory Beverage and CenterPoint Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and CenterPoint Energy
The main advantage of trading using opposite Suntory Beverage and CenterPoint Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage position performs unexpectedly, CenterPoint 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 CenterPoint Energy will offset losses from the drop in CenterPoint Energy's long position.| Suntory Beverage vs. Superior Plus Corp | Suntory Beverage vs. SIVERS SEMICONDUCTORS AB | Suntory Beverage vs. NorAm Drilling AS | Suntory Beverage vs. Norsk Hydro ASA |
| CenterPoint Energy vs. ScanSource | CenterPoint Energy vs. China Resources Beer | CenterPoint Energy vs. Eidesvik Offshore ASA | CenterPoint Energy vs. Suntory Beverage Food |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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