Correlation Between Entergy New and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both Entergy New and Maiden Holdings 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 Entergy New and Maiden Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entergy New Orleans and Maiden Holdings North, you can compare the effects of market volatilities on Entergy New and Maiden Holdings 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 Entergy New with a short position of Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entergy New and Maiden Holdings.
Diversification Opportunities for Entergy New and Maiden Holdings
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Entergy and Maiden is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Entergy New Orleans and Maiden Holdings North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden Holdings North and Entergy New 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 Entergy New Orleans are associated (or correlated) with Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings North has no effect on the direction of Entergy New i.e., Entergy New and Maiden Holdings go up and down completely randomly.
Pair Corralation between Entergy New and Maiden Holdings
Considering the 90-day investment horizon Entergy New Orleans is expected to generate 1.28 times more return on investment than Maiden Holdings. However, Entergy New is 1.28 times more volatile than Maiden Holdings North. It trades about 0.01 of its potential returns per unit of risk. Maiden Holdings North is currently generating about -0.11 per unit of risk. If you would invest 2,251 in Entergy New Orleans on November 9, 2024 and sell it today you would earn a total of 4.00 from holding Entergy New Orleans or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entergy New Orleans vs. Maiden Holdings North
Performance |
| Timeline |
| Entergy New Orleans |
| Maiden Holdings North |
Entergy New and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entergy New and Maiden Holdings
The main advantage of trading using opposite Entergy New and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entergy New position performs unexpectedly, Maiden Holdings 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 Maiden Holdings will offset losses from the drop in Maiden Holdings' long position.| Entergy New vs. Entergy Arkansas LLC | Entergy New vs. Entergy New Orleans | Entergy New vs. Entergy Mississippi LLC | Entergy New vs. Southern Co |
| Maiden Holdings vs. Maiden Holdings | Maiden Holdings vs. Affiliated Managers Group | Maiden Holdings vs. Entergy New Orleans | Maiden Holdings vs. American Financial Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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