Correlation Between Avista and United States
Can any of the company-specific risk be diversified away by investing in both Avista and United States 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 United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avista and United States Cellular, you can compare the effects of market volatilities on Avista and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avista and United States.
Diversification Opportunities for Avista and United States
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avista and United is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Avista and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of Avista i.e., Avista and United States go up and down completely randomly.
Pair Corralation between Avista and United States
Considering the 90-day investment horizon Avista is expected to generate 3.83 times less return on investment than United States. In addition to that, Avista is 2.21 times more volatile than United States Cellular. It trades about 0.01 of its total potential returns per unit of risk. United States Cellular is currently generating about 0.1 per unit of volatility. If you would invest 2,241 in United States Cellular on August 24, 2024 and sell it today you would earn a total of 29.00 from holding United States Cellular or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avista vs. United States Cellular
Performance |
| Timeline |
| Avista |
| United States Cellular |
Avista and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avista and United States
The main advantage of trading using opposite Avista and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avista position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Avista vs. Allete Inc | Avista vs. Black Hills | Avista vs. Montauk Renewables | Avista vs. Companhia Paranaense de |
| United States vs. United States Cellular | United States vs. United States Cellular | United States vs. Office Properties Income | United States vs. Southern Company Series |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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