Correlation Between Constellation Energy and Kansai Electric
Can any of the company-specific risk be diversified away by investing in both Constellation Energy 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 Constellation Energy and Kansai Electric 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 Kansai Electric Power, you can compare the effects of market volatilities on Constellation Energy 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 Constellation Energy with a short position of Kansai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Energy and Kansai Electric.
Diversification Opportunities for Constellation Energy and Kansai Electric
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Constellation and Kansai is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Energy Corp 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 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 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 Constellation Energy i.e., Constellation Energy and Kansai Electric go up and down completely randomly.
Pair Corralation between Constellation Energy and Kansai Electric
Considering the 90-day investment horizon Constellation Energy Corp is expected to generate 0.81 times more return on investment than Kansai Electric. However, Constellation Energy Corp is 1.24 times less risky than Kansai Electric. It trades about -0.02 of its potential returns per unit of risk. Kansai Electric Power is currently generating about -0.26 per unit of risk. If you would invest 26,137 in Constellation Energy Corp on August 31, 2024 and sell it today you would lose (798.00) from holding Constellation Energy Corp or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Constellation Energy Corp vs. Kansai Electric Power
Performance |
| Timeline |
| Constellation Energy Corp |
| Kansai Electric Power |
Constellation Energy and Kansai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Energy and Kansai Electric
The main advantage of trading using opposite Constellation Energy and Kansai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Energy 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.| Constellation Energy vs. Atlantica Sustainable Infrastructure | Constellation Energy vs. Clearway Energy | Constellation Energy vs. Brookfield Renewable Corp | Constellation Energy vs. Nextera Energy Partners |
| Kansai Electric vs. Constellation Energy Corp | Kansai Electric vs. Orsted AS ADR | Kansai Electric vs. HUMANA INC | Kansai Electric vs. Aquagold International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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