Correlation Between FirstEnergy and Vast Renewables
Can any of the company-specific risk be diversified away by investing in both FirstEnergy and Vast Renewables 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 FirstEnergy and Vast Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstEnergy and Vast Renewables Limited, you can compare the effects of market volatilities on FirstEnergy and Vast Renewables 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 FirstEnergy with a short position of Vast Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstEnergy and Vast Renewables.
Diversification Opportunities for FirstEnergy and Vast Renewables
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between FirstEnergy and Vast is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding FirstEnergy and Vast Renewables Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vast Renewables and FirstEnergy 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 FirstEnergy are associated (or correlated) with Vast Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vast Renewables has no effect on the direction of FirstEnergy i.e., FirstEnergy and Vast Renewables go up and down completely randomly.
Pair Corralation between FirstEnergy and Vast Renewables
Allowing for the 90-day total investment horizon FirstEnergy is expected to generate 0.04 times more return on investment than Vast Renewables. However, FirstEnergy is 24.5 times less risky than Vast Renewables. It trades about 0.2 of its potential returns per unit of risk. Vast Renewables Limited is currently generating about -0.04 per unit of risk. If you would invest 4,130 in FirstEnergy on September 2, 2024 and sell it today you would earn a total of 125.00 from holding FirstEnergy or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FirstEnergy vs. Vast Renewables Limited
Performance |
| Timeline |
| FirstEnergy |
| Vast Renewables |
FirstEnergy and Vast Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstEnergy and Vast Renewables
The main advantage of trading using opposite FirstEnergy and Vast Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstEnergy position performs unexpectedly, Vast Renewables 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 Vast Renewables will offset losses from the drop in Vast Renewables' long position.| FirstEnergy vs. CMS Energy | FirstEnergy vs. OGE Energy | FirstEnergy vs. DTE Energy | FirstEnergy vs. Ameren Corp |
| Vast Renewables vs. Western Sierra Mining | Vast Renewables vs. Mangazeya Mining | Vast Renewables vs. Western Digital | Vast Renewables vs. Olympic Steel |
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.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |