Correlation Between Getty Images and Nextera Energy
Can any of the company-specific risk be diversified away by investing in both Getty Images and Nextera Energy 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 Getty Images and Nextera Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Images Holdings and Nextera Energy, you can compare the effects of market volatilities on Getty Images and Nextera Energy 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 Getty Images with a short position of Nextera Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Nextera Energy.
Diversification Opportunities for Getty Images and Nextera Energy
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Getty and Nextera is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Nextera Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextera Energy and Getty Images 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 Getty Images Holdings are associated (or correlated) with Nextera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextera Energy has no effect on the direction of Getty Images i.e., Getty Images and Nextera Energy go up and down completely randomly.
Pair Corralation between Getty Images and Nextera Energy
Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Nextera Energy. In addition to that, Getty Images is 2.36 times more volatile than Nextera Energy. It trades about -0.04 of its total potential returns per unit of risk. Nextera Energy is currently generating about 0.07 per unit of volatility. If you would invest 3,450 in Nextera Energy on September 4, 2024 and sell it today you would earn a total of 878.00 from holding Nextera Energy or generate 25.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Images Holdings vs. Nextera Energy
Performance |
| Timeline |
| Getty Images Holdings |
| Nextera Energy |
Getty Images and Nextera Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Images and Nextera Energy
The main advantage of trading using opposite Getty Images and Nextera Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images position performs unexpectedly, Nextera Energy 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 Nextera Energy will offset losses from the drop in Nextera Energy's long position.| Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
| Nextera Energy vs. Sea | Nextera Energy vs. Getty Images Holdings | Nextera Energy vs. SunLink Health Systems | Nextera Energy vs. Simon Property 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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