Correlation Between CenterPoint Energy and Anterix
Can any of the company-specific risk be diversified away by investing in both CenterPoint Energy and Anterix 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 Anterix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CenterPoint Energy and Anterix, you can compare the effects of market volatilities on CenterPoint Energy and Anterix 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 Anterix. Check out your portfolio center. Please also check ongoing floating volatility patterns of CenterPoint Energy and Anterix.
Diversification Opportunities for CenterPoint Energy and Anterix
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CenterPoint and Anterix is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding CenterPoint Energy and Anterix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anterix 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 Anterix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anterix has no effect on the direction of CenterPoint Energy i.e., CenterPoint Energy and Anterix go up and down completely randomly.
Pair Corralation between CenterPoint Energy and Anterix
Considering the 90-day investment horizon CenterPoint Energy is expected to generate 0.62 times more return on investment than Anterix. However, CenterPoint Energy is 1.62 times less risky than Anterix. It trades about 0.36 of its potential returns per unit of risk. Anterix is currently generating about 0.11 per unit of risk. If you would invest 2,907 in CenterPoint Energy on August 31, 2024 and sell it today you would earn a total of 359.00 from holding CenterPoint Energy or generate 12.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CenterPoint Energy vs. Anterix
Performance |
| Timeline |
| CenterPoint Energy |
| Anterix |
CenterPoint Energy and Anterix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CenterPoint Energy and Anterix
The main advantage of trading using opposite CenterPoint Energy and Anterix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CenterPoint Energy position performs unexpectedly, Anterix 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 Anterix will offset losses from the drop in Anterix'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 |
| Anterix vs. RLJ Lodging Trust | Anterix vs. Aquagold International | Anterix vs. Stepstone Group | Anterix vs. Morningstar Unconstrained Allocation |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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