Correlation Between Constellation Energy and Beijing Capital
Can any of the company-specific risk be diversified away by investing in both Constellation Energy and Beijing Capital 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 Beijing Capital 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 Beijing Capital International, you can compare the effects of market volatilities on Constellation Energy and Beijing Capital 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 Beijing Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Energy and Beijing Capital.
Diversification Opportunities for Constellation Energy and Beijing Capital
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Constellation and Beijing is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Energy Corp and Beijing Capital International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Capital Inte 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 Beijing Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Capital Inte has no effect on the direction of Constellation Energy i.e., Constellation Energy and Beijing Capital go up and down completely randomly.
Pair Corralation between Constellation Energy and Beijing Capital
Considering the 90-day investment horizon Constellation Energy Corp is expected to generate 0.86 times more return on investment than Beijing Capital. However, Constellation Energy Corp is 1.16 times less risky than Beijing Capital. It trades about -0.01 of its potential returns per unit of risk. Beijing Capital International is currently generating about -0.04 per unit of risk. If you would invest 26,255 in Constellation Energy Corp on September 1, 2024 and sell it today you would lose (599.00) from holding Constellation Energy Corp or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Constellation Energy Corp vs. Beijing Capital International
Performance |
| Timeline |
| Constellation Energy Corp |
| Beijing Capital Inte |
Constellation Energy and Beijing Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Energy and Beijing Capital
The main advantage of trading using opposite Constellation Energy and Beijing Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Energy position performs unexpectedly, Beijing Capital 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 Beijing Capital will offset losses from the drop in Beijing Capital's long position.| Constellation Energy vs. Atlantica Sustainable Infrastructure | Constellation Energy vs. Clearway Energy | Constellation Energy vs. Brookfield Renewable Corp | Constellation Energy vs. Nextera Energy Partners |
| Beijing Capital vs. UDR Inc | Beijing Capital vs. FactSet Research Systems | Beijing Capital vs. Netflix | Beijing Capital vs. Scottie Resources Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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