Correlation Between Genie Energy and PGE Corp
Can any of the company-specific risk be diversified away by investing in both Genie Energy and PGE Corp 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 PGE Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genie Energy and PGE Corp, you can compare the effects of market volatilities on Genie Energy and PGE Corp 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 PGE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Energy and PGE Corp.
Diversification Opportunities for Genie Energy and PGE Corp
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Genie and PGE is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Genie Energy and PGE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGE Corp 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 PGE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGE Corp has no effect on the direction of Genie Energy i.e., Genie Energy and PGE Corp go up and down completely randomly.
Pair Corralation between Genie Energy and PGE Corp
Considering the 90-day investment horizon Genie Energy is expected to generate 1.97 times more return on investment than PGE Corp. However, Genie Energy is 1.97 times more volatile than PGE Corp. It trades about 0.03 of its potential returns per unit of risk. PGE Corp is currently generating about 0.01 per unit of risk. If you would invest 1,205 in Genie Energy on November 9, 2024 and sell it today you would earn a total of 239.00 from holding Genie Energy or generate 19.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genie Energy vs. PGE Corp
Performance |
| Timeline |
| Genie Energy |
| PGE Corp |
Genie Energy and PGE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Energy and PGE Corp
The main advantage of trading using opposite Genie Energy and PGE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Energy position performs unexpectedly, PGE Corp 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 PGE Corp will offset losses from the drop in PGE Corp's 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 |
| PGE Corp vs. Consolidated Edison | PGE Corp vs. Southern Company | PGE Corp vs. Entergy | PGE Corp vs. Pinnacle West Capital |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |