Correlation Between Constellation Energy and Astra Energy
Can any of the company-specific risk be diversified away by investing in both Constellation Energy and Astra Energy 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 Constellation Energy and Astra Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellation Energy Corp and Astra Energy, you can compare the effects of market volatilities on Constellation Energy and Astra Energy 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 Constellation Energy with a short position of Astra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Energy and Astra Energy.
Diversification Opportunities for Constellation Energy and Astra Energy
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Constellation and Astra is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Energy Corp and Astra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Energy and Constellation Energy 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 Constellation Energy Corp are associated (or correlated) with Astra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Energy has no effect on the direction of Constellation Energy i.e., Constellation Energy and Astra Energy go up and down completely randomly.
Pair Corralation between Constellation Energy and Astra Energy
Considering the 90-day investment horizon Constellation Energy is expected to generate 1.69 times less return on investment than Astra Energy. But when comparing it to its historical volatility, Constellation Energy Corp is 1.1 times less risky than Astra Energy. It trades about 0.14 of its potential returns per unit of risk. Astra Energy is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 7.80 in Astra Energy on November 4, 2024 and sell it today you would earn a total of 3.20 from holding Astra Energy or generate 41.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Constellation Energy Corp vs. Astra Energy
Performance |
| Timeline |
| Constellation Energy Corp |
| Astra Energy |
Constellation Energy and Astra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Energy and Astra Energy
The main advantage of trading using opposite Constellation Energy and Astra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Energy position performs unexpectedly, Astra Energy 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 Astra Energy will offset losses from the drop in Astra Energy's long position.| Constellation Energy vs. Clearway Energy | Constellation Energy vs. Brookfield Renewable Corp | Constellation Energy vs. Nextera Energy Partners | Constellation Energy vs. Brookfield Renewable Partners |
| Astra Energy vs. Alternus Energy Group | Astra Energy vs. American Security Resources | Astra Energy vs. Carnegie Clean Energy | Astra Energy vs. Brenmiller Energy Ltd |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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