Correlation Between Avista and EON SE
Can any of the company-specific risk be diversified away by investing in both Avista and EON SE 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 Avista and EON SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avista and EON SE ADR, you can compare the effects of market volatilities on Avista and EON SE 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 Avista with a short position of EON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avista and EON SE.
Diversification Opportunities for Avista and EON SE
Good diversification
The 3 months correlation between Avista and EON is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Avista and EON SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE ADR and Avista 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 Avista are associated (or correlated) with EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE ADR has no effect on the direction of Avista i.e., Avista and EON SE go up and down completely randomly.
Pair Corralation between Avista and EON SE
If you would invest 3,723 in Avista on August 30, 2024 and sell it today you would earn a total of 131.00 from holding Avista or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Avista vs. EON SE ADR
Performance |
| Timeline |
| Avista |
| EON SE ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Avista and EON SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avista and EON SE
The main advantage of trading using opposite Avista and EON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avista position performs unexpectedly, EON SE 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 EON SE will offset losses from the drop in EON SE's long position.| Avista vs. Allete Inc | Avista vs. Black Hills | Avista vs. Montauk Renewables | Avista vs. Companhia Paranaense de |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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