Correlation Between AES Corp and UNITIL
Can any of the company-specific risk be diversified away by investing in both AES Corp and UNITIL 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 AES Corp and UNITIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AES Corp Unit and UNITIL, you can compare the effects of market volatilities on AES Corp and UNITIL 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 AES Corp with a short position of UNITIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES Corp and UNITIL.
Diversification Opportunities for AES Corp and UNITIL
Good diversification
The 3 months correlation between AES and UNITIL is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding AES Corp Unit and UNITIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITIL and AES Corp 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 AES Corp Unit are associated (or correlated) with UNITIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITIL has no effect on the direction of AES Corp i.e., AES Corp and UNITIL go up and down completely randomly.
Pair Corralation between AES Corp and UNITIL
If you would invest 8,496 in AES Corp Unit on November 2, 2024 and sell it today you would earn a total of 0.00 from holding AES Corp Unit or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.97% |
| Values | Daily Returns |
AES Corp Unit vs. UNITIL
Performance |
| Timeline |
| AES Corp Unit |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| UNITIL |
AES Corp and UNITIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AES Corp and UNITIL
The main advantage of trading using opposite AES Corp and UNITIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES Corp position performs unexpectedly, UNITIL 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 UNITIL will offset losses from the drop in UNITIL's long position.| AES Corp vs. Ryder System | AES Corp vs. Vestis | AES Corp vs. Custom Truck One | AES Corp vs. Verde Clean Fuels |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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