Correlation Between CenterPoint Energy and DIH Holdings
Can any of the company-specific risk be diversified away by investing in both CenterPoint Energy and DIH Holdings 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 DIH Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CenterPoint Energy and DIH Holdings US,, you can compare the effects of market volatilities on CenterPoint Energy and DIH Holdings 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 DIH Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CenterPoint Energy and DIH Holdings.
Diversification Opportunities for CenterPoint Energy and DIH Holdings
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CenterPoint and DIH is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding CenterPoint Energy and DIH Holdings US, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIH Holdings US, 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 DIH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIH Holdings US, has no effect on the direction of CenterPoint Energy i.e., CenterPoint Energy and DIH Holdings go up and down completely randomly.
Pair Corralation between CenterPoint Energy and DIH Holdings
Considering the 90-day investment horizon CenterPoint Energy is expected to generate 10.01 times less return on investment than DIH Holdings. But when comparing it to its historical volatility, CenterPoint Energy is 6.22 times less risky than DIH Holdings. It trades about 0.03 of its potential returns per unit of risk. DIH Holdings US, is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 160.00 in DIH Holdings US, on September 12, 2024 and sell it today you would earn a total of 35.00 from holding DIH Holdings US, or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 56.84% |
| Values | Daily Returns |
CenterPoint Energy vs. DIH Holdings US,
Performance |
| Timeline |
| CenterPoint Energy |
| DIH Holdings US, |
CenterPoint Energy and DIH Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CenterPoint Energy and DIH Holdings
The main advantage of trading using opposite CenterPoint Energy and DIH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CenterPoint Energy position performs unexpectedly, DIH Holdings 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 DIH Holdings will offset losses from the drop in DIH Holdings' long position.| CenterPoint Energy vs. Southern Company | CenterPoint Energy vs. American Electric Power | CenterPoint Energy vs. Consolidated Edison | CenterPoint Energy vs. Duke Energy |
| DIH Holdings vs. Kaiser Aluminum | DIH Holdings vs. Park Hotels Resorts | DIH Holdings vs. Century Aluminum | DIH Holdings vs. Summit Environmental |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |