Correlation Between Black Hills and AES Corp
Can any of the company-specific risk be diversified away by investing in both Black Hills and AES Corp 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 Black Hills and AES Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Hills and AES Corp Unit, you can compare the effects of market volatilities on Black Hills and AES Corp 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 Black Hills with a short position of AES Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Hills and AES Corp.
Diversification Opportunities for Black Hills and AES Corp
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Black and AES is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Black Hills and AES Corp Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AES Corp Unit and Black Hills 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 Black Hills are associated (or correlated) with AES Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AES Corp Unit has no effect on the direction of Black Hills i.e., Black Hills and AES Corp go up and down completely randomly.
Pair Corralation between Black Hills and AES Corp
If you would invest 5,972 in Black Hills on August 28, 2024 and sell it today you would earn a total of 494.00 from holding Black Hills or generate 8.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Black Hills vs. AES Corp Unit
Performance |
| Timeline |
| Black Hills |
| AES Corp Unit |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Black Hills and AES Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Hills and AES Corp
The main advantage of trading using opposite Black Hills and AES Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Hills position performs unexpectedly, AES Corp 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 AES Corp will offset losses from the drop in AES Corp's long position.| Black Hills vs. NorthWestern | Black Hills vs. Avista | Black Hills vs. Otter Tail | Black Hills vs. Companhia Paranaense de |
| AES Corp vs. Codexis | AES Corp vs. Eastman Chemical | AES Corp vs. CF Industries Holdings | AES Corp vs. Sensient Technologies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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