Correlation Between China Aircraft and Nextera Energy
Can any of the company-specific risk be diversified away by investing in both China Aircraft and Nextera 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 China Aircraft and Nextera Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Aircraft Leasing and Nextera Energy, you can compare the effects of market volatilities on China Aircraft and Nextera 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 China Aircraft with a short position of Nextera Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aircraft and Nextera Energy.
Diversification Opportunities for China Aircraft and Nextera Energy
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Nextera is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing and Nextera Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextera Energy and China Aircraft 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 China Aircraft Leasing are associated (or correlated) with Nextera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextera Energy has no effect on the direction of China Aircraft i.e., China Aircraft and Nextera Energy go up and down completely randomly.
Pair Corralation between China Aircraft and Nextera Energy
If you would invest 40.00 in China Aircraft Leasing on August 28, 2024 and sell it today you would earn a total of 0.00 from holding China Aircraft Leasing or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Aircraft Leasing vs. Nextera Energy
Performance |
| Timeline |
| China Aircraft Leasing |
| Nextera Energy |
China Aircraft and Nextera Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aircraft and Nextera Energy
The main advantage of trading using opposite China Aircraft and Nextera Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aircraft position performs unexpectedly, Nextera 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 Nextera Energy will offset losses from the drop in Nextera Energy's long position.| China Aircraft vs. Grocery Outlet Holding | China Aircraft vs. Turning Point Brands | China Aircraft vs. Marfrig Global Foods | China Aircraft vs. FitLife Brands, Common |
| Nextera Energy vs. Dominion Energy | Nextera Energy vs. Consolidated Edison | Nextera Energy vs. Eversource Energy | Nextera Energy vs. FirstEnergy |
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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