Correlation Between Hawaiian Electric and CenterPoint Energy
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric and CenterPoint 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 Hawaiian Electric and CenterPoint Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Electric Industries and CenterPoint Energy, you can compare the effects of market volatilities on Hawaiian Electric and CenterPoint 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 Hawaiian Electric with a short position of CenterPoint Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and CenterPoint Energy.
Diversification Opportunities for Hawaiian Electric and CenterPoint Energy
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hawaiian and CenterPoint is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and CenterPoint Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CenterPoint Energy and Hawaiian Electric 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 Hawaiian Electric Industries are associated (or correlated) with CenterPoint Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CenterPoint Energy has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and CenterPoint Energy go up and down completely randomly.
Pair Corralation between Hawaiian Electric and CenterPoint Energy
Allowing for the 90-day total investment horizon Hawaiian Electric is expected to generate 1.05 times less return on investment than CenterPoint Energy. In addition to that, Hawaiian Electric is 1.52 times more volatile than CenterPoint Energy. It trades about 0.18 of its total potential returns per unit of risk. CenterPoint Energy is currently generating about 0.29 per unit of volatility. If you would invest 2,955 in CenterPoint Energy on August 28, 2024 and sell it today you would earn a total of 293.00 from holding CenterPoint Energy or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. CenterPoint Energy
Performance |
| Timeline |
| Hawaiian Electric |
| CenterPoint Energy |
Hawaiian Electric and CenterPoint Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and CenterPoint Energy
The main advantage of trading using opposite Hawaiian Electric and CenterPoint Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric position performs unexpectedly, CenterPoint 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 CenterPoint Energy will offset losses from the drop in CenterPoint Energy's long position.| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint Energy |
| CenterPoint Energy vs. Entergy | CenterPoint Energy vs. Ameren Corp | CenterPoint Energy vs. Alliant Energy Corp | CenterPoint Energy 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |