Correlation Between Commerce Energy and NorthWestern
Can any of the company-specific risk be diversified away by investing in both Commerce Energy and NorthWestern 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 Commerce Energy and NorthWestern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerce Energy Group and NorthWestern, you can compare the effects of market volatilities on Commerce Energy and NorthWestern 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 Commerce Energy with a short position of NorthWestern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerce Energy and NorthWestern.
Diversification Opportunities for Commerce Energy and NorthWestern
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commerce and NorthWestern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Commerce Energy Group and NorthWestern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorthWestern and Commerce 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 Commerce Energy Group are associated (or correlated) with NorthWestern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorthWestern has no effect on the direction of Commerce Energy i.e., Commerce Energy and NorthWestern go up and down completely randomly.
Pair Corralation between Commerce Energy and NorthWestern
If you would invest 5,534 in NorthWestern on August 27, 2024 and sell it today you would earn a total of 141.00 from holding NorthWestern or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Commerce Energy Group vs. NorthWestern
Performance |
| Timeline |
| Commerce Energy Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| NorthWestern |
Commerce Energy and NorthWestern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerce Energy and NorthWestern
The main advantage of trading using opposite Commerce Energy and NorthWestern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerce Energy position performs unexpectedly, NorthWestern 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 NorthWestern will offset losses from the drop in NorthWestern's long position.| Commerce Energy vs. AuraSource | Commerce Energy vs. Energy of Minas | Commerce Energy vs. Canadian Utilities Limited | Commerce Energy vs. Atco |
| NorthWestern vs. Allete Inc | NorthWestern vs. Black Hills | NorthWestern vs. Otter Tail | NorthWestern vs. Avista |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |