Correlation Between Georgia Power and Entergy New
Can any of the company-specific risk be diversified away by investing in both Georgia Power 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 Georgia Power and Entergy New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Georgia Power Co and Entergy New Orleans, you can compare the effects of market volatilities on Georgia Power 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 Georgia Power with a short position of Entergy New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Georgia Power and Entergy New.
Diversification Opportunities for Georgia Power and Entergy New
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Georgia and Entergy is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Georgia Power Co 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 Georgia Power 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 Georgia Power Co 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 Georgia Power i.e., Georgia Power and Entergy New go up and down completely randomly.
Pair Corralation between Georgia Power and Entergy New
Given the investment horizon of 90 days Georgia Power Co is expected to generate 0.83 times more return on investment than Entergy New. However, Georgia Power Co is 1.21 times less risky than Entergy New. It trades about -0.16 of its potential returns per unit of risk. Entergy New Orleans is currently generating about -0.24 per unit of risk. If you would invest 2,358 in Georgia Power Co on August 31, 2024 and sell it today you would lose (67.00) from holding Georgia Power Co or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Georgia Power Co vs. Entergy New Orleans
Performance |
| Timeline |
| Georgia Power |
| Entergy New Orleans |
Georgia Power and Entergy New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Georgia Power and Entergy New
The main advantage of trading using opposite Georgia Power and Entergy New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Georgia Power 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.| Georgia Power vs. Southern Co | Georgia Power vs. Entergy Arkansas LLC | Georgia Power vs. DTE Energy Co | Georgia Power vs. Entergy New Orleans |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| 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 |