Correlation Between Electricite and Engie SA
Can any of the company-specific risk be diversified away by investing in both Electricite and Engie SA 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 Electricite and Engie SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electricite De France and Engie SA ADR, you can compare the effects of market volatilities on Electricite and Engie SA 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 Electricite with a short position of Engie SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electricite and Engie SA.
Diversification Opportunities for Electricite and Engie SA
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electricite and Engie is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Electricite De France and Engie SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engie SA ADR and Electricite 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 Electricite De France are associated (or correlated) with Engie SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engie SA ADR has no effect on the direction of Electricite i.e., Electricite and Engie SA go up and down completely randomly.
Pair Corralation between Electricite and Engie SA
If you would invest 255.00 in Electricite De France on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Electricite De France or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Electricite De France vs. Engie SA ADR
Performance |
| Timeline |
| Electricite De France |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Engie SA ADR |
Electricite and Engie SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electricite and Engie SA
The main advantage of trading using opposite Electricite and Engie SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electricite position performs unexpectedly, Engie SA 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 Engie SA will offset losses from the drop in Engie SA's long position.| Electricite vs. RWE AG PK | Electricite vs. ENEL Societa per | Electricite vs. Companhia Paranaense de | Electricite vs. Iberdrola SA |
| Engie SA vs. Nextera Energy | Engie SA vs. Consumers Energy | Engie SA vs. Duke Energy | Engie SA vs. Centrais Electricas Brasileiras |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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