Correlation Between Hawaiian Electric and IShares 5
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric and IShares 5 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 IShares 5 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 iShares 5 10 Year, you can compare the effects of market volatilities on Hawaiian Electric and IShares 5 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 IShares 5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and IShares 5.
Diversification Opportunities for Hawaiian Electric and IShares 5
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hawaiian and IShares is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and iShares 5 10 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 5 10 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 IShares 5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 5 10 has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and IShares 5 go up and down completely randomly.
Pair Corralation between Hawaiian Electric and IShares 5
Allowing for the 90-day total investment horizon Hawaiian Electric Industries is expected to under-perform the IShares 5. In addition to that, Hawaiian Electric is 12.51 times more volatile than iShares 5 10 Year. It trades about -0.02 of its total potential returns per unit of risk. iShares 5 10 Year is currently generating about 0.05 per unit of volatility. If you would invest 4,705 in iShares 5 10 Year on December 12, 2024 and sell it today you would earn a total of 502.00 from holding iShares 5 10 Year or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. iShares 5 10 Year
Performance |
| Timeline |
| Hawaiian Electric |
| iShares 5 10 |
Hawaiian Electric and IShares 5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and IShares 5
The main advantage of trading using opposite Hawaiian Electric and IShares 5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric position performs unexpectedly, IShares 5 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 IShares 5 will offset losses from the drop in IShares 5's long position.| Hawaiian Electric vs. DTE Energy | ||
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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