Correlation Between Genie Energy and Xcel Energy
Can any of the company-specific risk be diversified away by investing in both Genie Energy and Xcel 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 Genie Energy and Xcel Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genie Energy and Xcel Energy, you can compare the effects of market volatilities on Genie Energy and Xcel 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 Genie Energy with a short position of Xcel Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Energy and Xcel Energy.
Diversification Opportunities for Genie Energy and Xcel Energy
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genie and Xcel is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Genie Energy and Xcel Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xcel Energy 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 Xcel Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xcel Energy has no effect on the direction of Genie Energy i.e., Genie Energy and Xcel Energy go up and down completely randomly.
Pair Corralation between Genie Energy and Xcel Energy
Considering the 90-day investment horizon Genie Energy is expected to generate 19.17 times less return on investment than Xcel Energy. In addition to that, Genie Energy is 1.33 times more volatile than Xcel Energy. It trades about 0.01 of its total potential returns per unit of risk. Xcel Energy is currently generating about 0.32 per unit of volatility. If you would invest 6,448 in Xcel Energy on August 27, 2024 and sell it today you would earn a total of 687.00 from holding Xcel Energy or generate 10.65% 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. Xcel Energy
Performance |
| Timeline |
| Genie Energy |
| Xcel Energy |
Genie Energy and Xcel Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Energy and Xcel Energy
The main advantage of trading using opposite Genie Energy and Xcel Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Energy position performs unexpectedly, Xcel 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 Xcel Energy will offset losses from the drop in Xcel Energy'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 |
| Xcel Energy vs. Alliant Energy Corp | Xcel Energy vs. Entergy | Xcel Energy vs. Pinnacle West Capital | Xcel Energy vs. CMS Energy |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |