Correlation Between Ellomay Capital and Entergy Arkansas
Can any of the company-specific risk be diversified away by investing in both Ellomay Capital and Entergy Arkansas 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 Ellomay Capital and Entergy Arkansas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellomay Capital and Entergy Arkansas LLC, you can compare the effects of market volatilities on Ellomay Capital and Entergy Arkansas 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 Ellomay Capital with a short position of Entergy Arkansas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellomay Capital and Entergy Arkansas.
Diversification Opportunities for Ellomay Capital and Entergy Arkansas
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ellomay and Entergy is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ellomay Capital and Entergy Arkansas LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy Arkansas LLC and Ellomay Capital 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 Ellomay Capital are associated (or correlated) with Entergy Arkansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy Arkansas LLC has no effect on the direction of Ellomay Capital i.e., Ellomay Capital and Entergy Arkansas go up and down completely randomly.
Pair Corralation between Ellomay Capital and Entergy Arkansas
Given the investment horizon of 90 days Ellomay Capital is expected to generate 3.94 times more return on investment than Entergy Arkansas. However, Ellomay Capital is 3.94 times more volatile than Entergy Arkansas LLC. It trades about 0.02 of its potential returns per unit of risk. Entergy Arkansas LLC is currently generating about 0.04 per unit of risk. If you would invest 1,500 in Ellomay Capital on August 27, 2024 and sell it today you would earn a total of 102.00 from holding Ellomay Capital or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.98% |
| Values | Daily Returns |
Ellomay Capital vs. Entergy Arkansas LLC
Performance |
| Timeline |
| Ellomay Capital |
| Entergy Arkansas LLC |
Ellomay Capital and Entergy Arkansas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellomay Capital and Entergy Arkansas
The main advantage of trading using opposite Ellomay Capital and Entergy Arkansas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellomay Capital position performs unexpectedly, Entergy Arkansas 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 Entergy Arkansas will offset losses from the drop in Entergy Arkansas' long position.| Ellomay Capital vs. Enlight Renewable Energy | Ellomay Capital vs. Renew Energy Global | Ellomay Capital vs. Clearway Energy Class | Ellomay Capital vs. Excelerate Energy |
| Entergy Arkansas vs. Entergy Mississippi LLC | Entergy Arkansas vs. Entergy New Orleans | Entergy Arkansas vs. Entergy Louisiana LLC | Entergy Arkansas vs. Southern Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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