Correlation Between Genie Energy and Pacific Gas
Can any of the company-specific risk be diversified away by investing in both Genie Energy and Pacific Gas 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 Genie Energy and Pacific Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genie Energy and Pacific Gas and, you can compare the effects of market volatilities on Genie Energy and Pacific Gas 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 Genie Energy with a short position of Pacific Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Energy and Pacific Gas.
Diversification Opportunities for Genie Energy and Pacific Gas
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genie and Pacific is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Genie Energy and Pacific Gas and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Gas and Genie Energy 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 Genie Energy are associated (or correlated) with Pacific Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Gas has no effect on the direction of Genie Energy i.e., Genie Energy and Pacific Gas go up and down completely randomly.
Pair Corralation between Genie Energy and Pacific Gas
Considering the 90-day investment horizon Genie Energy is expected to generate 2.32 times more return on investment than Pacific Gas. However, Genie Energy is 2.32 times more volatile than Pacific Gas and. It trades about 0.04 of its potential returns per unit of risk. Pacific Gas and is currently generating about 0.05 per unit of risk. If you would invest 1,180 in Genie Energy on August 27, 2024 and sell it today you would earn a total of 424.00 from holding Genie Energy or generate 35.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genie Energy vs. Pacific Gas and
Performance |
| Timeline |
| Genie Energy |
| Pacific Gas |
Genie Energy and Pacific Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Energy and Pacific Gas
The main advantage of trading using opposite Genie Energy and Pacific Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Energy position performs unexpectedly, Pacific Gas 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 Pacific Gas will offset losses from the drop in Pacific Gas' long position.| Genie Energy vs. Centrais Electricas Brasileiras | Genie Energy vs. Central Puerto SA | Genie Energy vs. Korea Electric Power | Genie Energy vs. Empresa Distribuidora y |
| Pacific Gas vs. Pacific Gas and | Pacific Gas vs. Pacific Gas and | Pacific Gas vs. Pacific Gas and | Pacific Gas vs. Pacific Gas and |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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