Correlation Between Electricity Generating and Energy Absolute
Can any of the company-specific risk be diversified away by investing in both Electricity Generating and Energy Absolute 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 Electricity Generating and Energy Absolute into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electricity Generating Public and Energy Absolute Public, you can compare the effects of market volatilities on Electricity Generating and Energy Absolute 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 Electricity Generating with a short position of Energy Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electricity Generating and Energy Absolute.
Diversification Opportunities for Electricity Generating and Energy Absolute
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Electricity and Energy is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Electricity Generating Public and Energy Absolute Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Absolute Public and Electricity Generating 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 Electricity Generating Public are associated (or correlated) with Energy Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Absolute Public has no effect on the direction of Electricity Generating i.e., Electricity Generating and Energy Absolute go up and down completely randomly.
Pair Corralation between Electricity Generating and Energy Absolute
Assuming the 90 days trading horizon Electricity Generating Public is expected to generate 0.26 times more return on investment than Energy Absolute. However, Electricity Generating Public is 3.84 times less risky than Energy Absolute. It trades about -0.15 of its potential returns per unit of risk. Energy Absolute Public is currently generating about -0.21 per unit of risk. If you would invest 11,950 in Electricity Generating Public on October 24, 2024 and sell it today you would lose (500.00) from holding Electricity Generating Public or give up 4.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Electricity Generating Public vs. Energy Absolute Public
Performance |
| Timeline |
| Electricity Generating |
| Energy Absolute Public |
Electricity Generating and Energy Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electricity Generating and Energy Absolute
The main advantage of trading using opposite Electricity Generating and Energy Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electricity Generating position performs unexpectedly, Energy Absolute 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 Energy Absolute will offset losses from the drop in Energy Absolute's long position.| Electricity Generating vs. PTT Public | Electricity Generating vs. The Siam Cement | Electricity Generating vs. Ratch Group Public | Electricity Generating vs. Bangkok Bank Public |
| Energy Absolute vs. Gulf Energy Development | Energy Absolute vs. Global Power Synergy | Energy Absolute vs. CP ALL Public | Energy Absolute vs. Bangkok Dusit Medical |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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