Correlation Between Forrester Research and Entergy New
Can any of the company-specific risk be diversified away by investing in both Forrester Research and Entergy New 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 Forrester Research and Entergy New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forrester Research and Entergy New Orleans, you can compare the effects of market volatilities on Forrester Research and Entergy New 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 Forrester Research with a short position of Entergy New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forrester Research and Entergy New.
Diversification Opportunities for Forrester Research and Entergy New
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Forrester and Entergy is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Forrester Research and Entergy New Orleans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy New Orleans and Forrester Research 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 Forrester Research are associated (or correlated) with Entergy New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy New Orleans has no effect on the direction of Forrester Research i.e., Forrester Research and Entergy New go up and down completely randomly.
Pair Corralation between Forrester Research and Entergy New
Given the investment horizon of 90 days Forrester Research is expected to generate 8.27 times less return on investment than Entergy New. In addition to that, Forrester Research is 3.62 times more volatile than Entergy New Orleans. It trades about 0.0 of its total potential returns per unit of risk. Entergy New Orleans is currently generating about 0.05 per unit of volatility. If you would invest 2,237 in Entergy New Orleans on September 2, 2024 and sell it today you would earn a total of 89.00 from holding Entergy New Orleans or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forrester Research vs. Entergy New Orleans
Performance |
| Timeline |
| Forrester Research |
| Entergy New Orleans |
Forrester Research and Entergy New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forrester Research and Entergy New
The main advantage of trading using opposite Forrester Research and Entergy New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forrester Research position performs unexpectedly, Entergy New 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 New will offset losses from the drop in Entergy New's long position.| Forrester Research vs. CRA International | Forrester Research vs. Huron Consulting Group | Forrester Research vs. Franklin Covey | Forrester Research vs. ICF International |
| Entergy New vs. Entergy Arkansas LLC | Entergy New vs. Entergy New Orleans | Entergy New vs. Entergy Mississippi LLC | Entergy New 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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