Correlation Between CenterPoint Energy and Atec
Can any of the company-specific risk be diversified away by investing in both CenterPoint Energy and Atec 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 CenterPoint Energy and Atec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CenterPoint Energy and Atec Inc, you can compare the effects of market volatilities on CenterPoint Energy and Atec 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 CenterPoint Energy with a short position of Atec. Check out your portfolio center. Please also check ongoing floating volatility patterns of CenterPoint Energy and Atec.
Diversification Opportunities for CenterPoint Energy and Atec
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CenterPoint and Atec is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding CenterPoint Energy and Atec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atec Inc and CenterPoint 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 CenterPoint Energy are associated (or correlated) with Atec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atec Inc has no effect on the direction of CenterPoint Energy i.e., CenterPoint Energy and Atec go up and down completely randomly.
Pair Corralation between CenterPoint Energy and Atec
Considering the 90-day investment horizon CenterPoint Energy is expected to generate 2.89 times less return on investment than Atec. But when comparing it to its historical volatility, CenterPoint Energy is 1.3 times less risky than Atec. It trades about 0.02 of its potential returns per unit of risk. Atec Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,505 in Atec Inc on September 5, 2024 and sell it today you would earn a total of 650.00 from holding Atec Inc or generate 43.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CenterPoint Energy vs. Atec Inc
Performance |
| Timeline |
| CenterPoint Energy |
| Atec Inc |
CenterPoint Energy and Atec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CenterPoint Energy and Atec
The main advantage of trading using opposite CenterPoint Energy and Atec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CenterPoint Energy position performs unexpectedly, Atec 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 Atec will offset losses from the drop in Atec's long position.| CenterPoint Energy vs. DTE Energy | CenterPoint Energy vs. Alliant Energy Corp | CenterPoint Energy vs. Ameren Corp | CenterPoint Energy vs. Pinnacle West Capital |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |