Correlation Between CenterPoint Energy and Salon City
Can any of the company-specific risk be diversified away by investing in both CenterPoint Energy and Salon City 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 Salon City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CenterPoint Energy and Salon City, you can compare the effects of market volatilities on CenterPoint Energy and Salon City 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 Salon City. Check out your portfolio center. Please also check ongoing floating volatility patterns of CenterPoint Energy and Salon City.
Diversification Opportunities for CenterPoint Energy and Salon City
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CenterPoint and Salon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CenterPoint Energy and Salon City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salon City 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 Salon City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salon City has no effect on the direction of CenterPoint Energy i.e., CenterPoint Energy and Salon City go up and down completely randomly.
Pair Corralation between CenterPoint Energy and Salon City
If you would invest 3,267 in CenterPoint Energy on November 28, 2024 and sell it today you would earn a total of 137.00 from holding CenterPoint Energy or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CenterPoint Energy vs. Salon City
Performance |
| Timeline |
| CenterPoint Energy |
| Salon City |
CenterPoint Energy and Salon City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CenterPoint Energy and Salon City
The main advantage of trading using opposite CenterPoint Energy and Salon City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CenterPoint Energy position performs unexpectedly, Salon City 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 Salon City will offset losses from the drop in Salon City'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 |
| Salon City vs. Corsair Gaming | Salon City vs. Graham Holdings Co | Salon City vs. Daily Journal Corp | Salon City vs. WEBTOON Entertainment Common |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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