Correlation Between Consolidated Edison and Georgia Power
Can any of the company-specific risk be diversified away by investing in both Consolidated Edison and Georgia Power 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 Consolidated Edison and Georgia Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Edison and Georgia Power Co, you can compare the effects of market volatilities on Consolidated Edison and Georgia Power 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 Consolidated Edison with a short position of Georgia Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Edison and Georgia Power.
Diversification Opportunities for Consolidated Edison and Georgia Power
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Consolidated and Georgia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Edison and Georgia Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Georgia Power and Consolidated Edison 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 Consolidated Edison are associated (or correlated) with Georgia Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Georgia Power has no effect on the direction of Consolidated Edison i.e., Consolidated Edison and Georgia Power go up and down completely randomly.
Pair Corralation between Consolidated Edison and Georgia Power
Allowing for the 90-day total investment horizon Consolidated Edison is expected to generate 1.13 times more return on investment than Georgia Power. However, Consolidated Edison is 1.13 times more volatile than Georgia Power Co. It trades about 0.17 of its potential returns per unit of risk. Georgia Power Co is currently generating about 0.17 per unit of risk. If you would invest 8,903 in Consolidated Edison on November 3, 2024 and sell it today you would earn a total of 471.00 from holding Consolidated Edison or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consolidated Edison vs. Georgia Power Co
Performance |
| Timeline |
| Consolidated Edison |
| Georgia Power |
Consolidated Edison and Georgia Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Edison and Georgia Power
The main advantage of trading using opposite Consolidated Edison and Georgia Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Edison position performs unexpectedly, Georgia Power 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 Georgia Power will offset losses from the drop in Georgia Power's long position.| Consolidated Edison vs. Duke Energy | Consolidated Edison vs. Dominion Energy | Consolidated Edison vs. American Electric Power | Consolidated Edison vs. Nextera Energy |
| Georgia Power vs. Southern Co | Georgia Power vs. Entergy Arkansas LLC | Georgia Power vs. DTE Energy Co | Georgia Power vs. Entergy New Orleans |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |