Correlation Between Atlantic Wind and Kansai Electric
Can any of the company-specific risk be diversified away by investing in both Atlantic Wind and Kansai Electric 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 Atlantic Wind and Kansai Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantic Wind Solar and Kansai Electric Power, you can compare the effects of market volatilities on Atlantic Wind and Kansai Electric 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 Atlantic Wind with a short position of Kansai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic Wind and Kansai Electric.
Diversification Opportunities for Atlantic Wind and Kansai Electric
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atlantic and Kansai is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Wind Solar and Kansai Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kansai Electric Power and Atlantic Wind 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 Atlantic Wind Solar are associated (or correlated) with Kansai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kansai Electric Power has no effect on the direction of Atlantic Wind i.e., Atlantic Wind and Kansai Electric go up and down completely randomly.
Pair Corralation between Atlantic Wind and Kansai Electric
Given the investment horizon of 90 days Atlantic Wind Solar is expected to under-perform the Kansai Electric. In addition to that, Atlantic Wind is 1.25 times more volatile than Kansai Electric Power. It trades about -0.16 of its total potential returns per unit of risk. Kansai Electric Power is currently generating about -0.2 per unit of volatility. If you would invest 804.00 in Kansai Electric Power on September 3, 2024 and sell it today you would lose (169.00) from holding Kansai Electric Power or give up 21.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Atlantic Wind Solar vs. Kansai Electric Power
Performance |
| Timeline |
| Atlantic Wind Solar |
| Kansai Electric Power |
Atlantic Wind and Kansai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantic Wind and Kansai Electric
The main advantage of trading using opposite Atlantic Wind and Kansai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic Wind position performs unexpectedly, Kansai Electric 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 Kansai Electric will offset losses from the drop in Kansai Electric's long position.| Atlantic Wind vs. Green Stream Holdings | Atlantic Wind vs. VirExit Technologies | Atlantic Wind vs. Clean Vision Corp | Atlantic Wind vs. SolarWindow Technologies |
| Kansai Electric vs. Wind Works Power | Kansai Electric vs. Alternus Energy Group | Kansai Electric vs. Mass Megawat Wind | Kansai Electric vs. Enlight Renewable Energy |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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